For Consumers, Policy, Renewables

Refocusing energy to benefit consumers, not retailers

Despite anticipated resistance from Australia’s energy companies, the Consumer Data Right regulatory change is a big win for customers, writes Bruce Macfarlane, director and interim CEO of energy management company Energy Action.

Australia’s Consumer Data Right (CDR) is a powerful regulatory change that will unlock lower energy bills with easy access to data for customers and businesses, and enable new net-zero certification solutions.

While the energy markets’ current focus is gas supply and high prices, CDR is set to become the next energy battleground. We can expect energy industry incumbents attempt to protect their patch at the expense of innovation, service and sustainability as CDR requires energy retailers to share data with customer-nominated third parties, shifting data ownership from energy companies to consumers.

Is consumer data and energy consumption that important?

The open data economy is driving economic growth and innovation for individuals and businesses in many industry sectors globally. Access to information is extraordinarily powerful. It is the basis for creating customer-focused, innovative services and enabling market competition.

It is currently possible for customers to get and share their data, but it is a long-winded and headache-inducing process that turns off most people, giving the energy industry a virtual monopoly over consumer data. The focus on consumers and business owners is a long overdue energy data shift.

Benefits for business

Businesses want easy and immediate access to their energy data. The introduction of CDR means that from November 2022, energy companies will need to give consumers access to their usage and connection data in a standardised format in almost real time.

With energy companies compelled to share data within tight timeframes – something they’ve never had to do before – customers will be able to compare energy contracts with ease and switch providers more quickly. Additionally, businesses can shop around to be sure they are getting a great price on their energy contract.

For energy management companies such as Energy Action, it will enable the delivery of better value and service to customers, further removing the need for the customer to think about energy data at all.

Procurement and energy management services can be delivered faster, cutting out time waiting on energy retailers to deliver data. With less time spent finding data and more time using data, contracting overheads significantly reduce and analyse services become available to more customers.

One of the big barriers to creating easily scalable tech solutions is access to standardised data. With clean and immediate access to this data, energy management companies will be able to provide better services at scale to customers. For example, procurement automation will mean contacts can be compared several times to find the optimal price for the client.

Bruce Macfarlane, director and interim CEO of energy management company Energy Action. Photo: Supplied.

Unlocking net zero

Near-real-time data also opens up net-zero solutions. In the sustainability and net-zero worlds, transparency is vital. Reliable, clear information means the impact is easier to unlock and measure.

Better energy reporting outcomes will allow businesses to reduce their usage and provide automation that shows usage and spend reduction efforts in real time. It will also reduce cost-to-serve.

With energy data aggregated in one place, energy management companies can provide automation of more advanced net-zero services, including evaluations such as solar installation, demand management and metering.

Companies can more easily identify net-zero opportunities and invest in solutions with measurable impact, ultimately providing confidence to stakeholders and investors that net-zero goals are reached.

Putting the customer centre stage

Federal Treasury is the lead agency for CDR, with the Australian Competition and Consumer Commission (ACCC) guiding its rulemaking, consumer education and enforcement.

This is a shift away from the traditional Australian Energy Market Operator (AEMO), Australian Energy Market Commission (AEMC) and Australian Energy Regulator (AER) run energy change management and will inevitably see consumers put at the forefront of the discussion rather than excluded from the process through highly technical and inaccessible rule changes beholden to the energy industry and their working groups.

Incumbents are lobbying hard against the change to protect the status quo, maintaining the data is irrelevant to customers and that the new mandate will impose unnecessary costs. Both statements are untrue.

Concerns about sharing customer details with third parties are used as a scare tactic by the sector despite the need for them to be accredited by the ACCC and to undertake data audits.

The banking sector is embracing open data. Banks are voluntarily getting accredited to receive data rather than just meeting obligations to send it. They recognise its ability to offer customer value and uncover internal inefficiencies.

While AGL, Energy Australia and Origin Energy are the first required to open up, it is possible that other energy companies will see the value once the data starts to flow and they may want to join in.

The energy industry might even grow to embrace the changes as the more innovative banks have.

It’s imperative the ACCC holds its nerve in response to energy company lobbying. There is an imperative to drive this – the Federal Government recently committed $38.4 million during the next three years to implement its response to the Future Directions for the Consumer Data Right, in addition to the existing $254 million investment to develop and accelerate the rollout.

Energy companies have been managing energy market changes in their own interests for the past 20 years. These changes are needed to force reluctant energy companies to provide quality and timely data that services the customer, rather than their internal processes. Market participants currently communicate with B2B technology, and the infrastructure and capability is there to build on.

Consumers will benefit from a well-structured energy CDR that, ideally, applies to all energy companies. Open energy data will give tech companies the opportunity to build new and better businesses and push energy companies to improve their services.

In both cases, the ultimate winners are customers.

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