PEOPLE WILL PAY FOR NEW ENERGY

Fascinatingly, the IBM report compares electricity consumers to TV watchers and concludes that, as with TV watchers, electricity consumers are becoming less passive as they are offered more choices. The tipping point is eminent: Consumer involvement, climate change awareness and new technology have created a new retail electricity customer more than ready for New Energy and a “smart” grid.

Customers now know there are alternatives to unending dependence on the utility: efficiency and self-generation.

An Intelligent Utility Network with network automation, analytics and “smart” meters will reduce outages, restore service faster and cut greenhouse gas emissions.

Within five years, energy supplier choice will allow consumers in most major markets to easily switch to providers who offer the right services. Such customers will drive the industry toward a Participatory Network model.

Also within five years, the number of the world's electric utilities generating 10% or more of their power from New Energy will double.

When consumers have choices they will take advantage of them. (click to enlarge)

Consumers will pay more for “green” energy: poll
December 14, 2007 (Reuters via Yahoo News)
and
IBM predicts consumers will actively plug in to the energy business
13 November 2007 (IBM)

WHO
1,894 primary bill payers in households and small businesses located in six countries and 100 senior executives from Utility and Energy Services companies in 26 different countries; IBM Global Business Services Survey authors Michael Valocchi, Global Lead Partner, Energy and Utilities & Allan Schurr, Vice President, Strategy & Development & Ekow Nelson, Communications Sector Leader and John Juliano, Consultant, Utilities industry;

WHAT
Plugging in the consumer: Innovating utility business models for the future, an
IBM Institute for Business Value Energy Customer Survey found major changes in the retail power market. A diverse consumer base wants New Energy and is willing to pay for it. Utility companies need to prepare a participatory network giving customers a choice of suppliers and the opportunity to manage their consumption as well as sell back power they generate.

Utilities will expand the choices of energy sources they use - because consumers want them and climate change demands them. (click to enlarge)

WHEN
The research was conducted during June and July 2007.

WHERE
Customers in Australia, Germany, Japan, the Netherlands, the United Kingdom and the United States; executives in 26 different countries across Europe, North America and Asia Pacific.

WHY
- Nearly 70% said they would pay a premium for "green" energy alternatives.
- Australians were the most willing to pay more. Americans said they would pay the highest premium – 20% more. Germans are the most environmentally conscious: 1 in 3 said they had evaluated their everyday choices (1 in 7 Americans).
- Nearly half said they would pay more for environmentally-friendly products.
- 50%+ were interested in self-generation if they could save 50% on energy costs, have 100% reliability at no additional cost, or sell power back to the utility.
- 50% + utility industry executives believe that the availability of new technologies could move residential and small commercial customers to self-generation within 10 years.
- Outside the US, 1 of 4 had computed the climate change impact of their energy use and 60%+ expressed an interest in obtaining New Energy

The result will be Participatory Networks. (click to enlarge)

QUOTES
- Schurr, IBM Global Energy & Utilities: "What was surprising to us was there was such a strong interest by consumers to become more activist around energy…They want to be more involved in the decision-making process, to be more sensitive to price concerns and environmental concerns."
- Valocchi, IBM Global Energy & Utilities: "The next five years will be pivotal for the utility industry. Consumer needs and roles are expanding, and many are no longer content to be passive recipients of services. They want more choices about the type of energy they buy, and they want to more actively manage their usage to reduce costs and environmental impact…Utility companies need to revisit long-held beliefs about how best to serve customers and make fundamental changes to their strategies and operations in preparation for a more participatory environment."