Blockchain – A new era in utilities customer experience

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Blockchain technology in utilities will transform customer experience and give them more control over their utility consumption and production. It will enable consumers to produce their own energy and sell back to the grid, which will encourage energy saving amongst the population – the more energy saved, the more can be sold to the grid, resulting in more income for the producer.

The world around us is constantly changing, faster than ever before. People are changing – their lifestyles, diet, content consumption, travel habits; to name a few. Customers seek brand validation through peer to peer product reviews, prior to making a purchase. Brand loyalty is becoming an increasing thing of the past, as the digital abode gives way to a plethora of options at customers’ fingertips.

Disruption, once frowned upon, now seems to be the Holy Grail of emerging start-ups and new technologies. It isn’t the best quality product that wins, it is the best known. As a result, at the heart of consumer choice is trust. People find a source of comfort, and have greater belief, in fellow consumers’ product descriptions as opposed to brands.

In recent years, there has been an emerging technology which plays towards this priceless capital of trust, which has the potential to transform customer experience – blockchain.

In an industry where competition has been historically dominated by price, the utilities sector is on a journey of transformation. Recently, the focus of this transformation has been around creating value from renewable generation. Blockchain has played a greater impact on this transformation than any other technology. In this blog, I explore a few of the exciting potentials for Blockchain technology in the utilities industry.

How can blockchain help revitalise customer experience in utilities?

Despite the immaturity of the technology, there are emerging opportunities for blockchain in utilities customer experience:

  1. Peer-to-peer energy trading: With the increasing uptake of renewable energy generation, consumers have become providers, and sell any surplus energy back to the grid as a means of income generation, thus increasing competition and grid efficiency.With the introduction of blockchain, the monopoly will no longer remain in the power of the grid, but rather with the customers. Customers will be able to buy locally produced energy, which is likely to be cheaper than buying from their utility provider. This will also benefit the customer producing the energy as they will generate more income than they would from the grid. This is made possible through blockchain’s relatively low transaction costs. Smart contracts facilitate the real-time coordination of production data from energy sources and administer sales contracts that enable a two-way energy exchange.
  1. Smart contracts are the most ambitious application of blockchain technology which adds infinite possibilities in providing trust to both parties in a transaction. More can be found on smart contracts here.
  1. Switching suppliers: As noted in an article from the Harvard Business Review, companies are running pilots to explore blockchain’s potential to make existing processes such as meter registration, more efficient and less costly. British start-up Electron is developing a blockchain platform that could allow British customers to switch power suppliers reliably within a day. To do so they have partnered up with the Data Communications Company, the UK’s new centralised meter data agency.

Cultural acceptance

There seems to be a higher risk appetite in European utilities compared with their American counterparts, as well as amongst start-ups compared to the more established players in the sector. North American utilities are adopting a stand-off approach, whilst across European utilities, there are already three utility blockchain implementations.

Utilities’ timid response to blockchain was evident in the resources that companies dedicated to the technology. Research carried out by David Groarke, managing director of Indigo Advisory Group, found companies had an average of just 2.2 full-time employees working on blockchain projects. Groarke predicted the launch of a global standard could lead to higher blockchain adoption by North American utilities. Another factor that could help improve uptake would be the merging of blockchain with other technologies, such as artificial intelligence and smart contracts.

Source: Capgemini Research Institute, Blockchain Survey; April–May 2018, N=447 organisations.

Trust – a priceless commodity

It’s safe to say that if you’re reading this, you have probably made an online purchase or two in your lifetime. Aside from the major brands, were you ever considering making a purchase from an unfamiliar website? Perhaps you refrained from doing so in fear of identity fraud. This is exactly where blockchain can play its part in alleviating concerns of business credibility.

By holding the keys to customer identity in an independent, trusted location, blockchain can act as the mediator to verify legitimacy of both parties, the business and the customer. This revolutionary approach will shift the business-customer paradigm and hand power back to the customer, who has the final say over whether they choose to share their information.

Not only is the customer in control, but it will also encourage businesses to rethink their approach, and inevitably become a more customer-centric organisation. Data will no longer be a by-product of a customer purchase, but rather a privilege given to those who earn the trust of its customers.

Blockchain blockers

However, for all its possibilities, there are significant barriers to overcome before the utility of blockchain can become a mainstream business model. Majority of blockchain applications require vast data management, infrastructure, compliance adherence, and security costs to extract value at scale. Established utilities companies can also be expected to become defensive against anything that threatens the status quo.

On the other hand, despite its limitations, Bitcoin has already demonstrated how blockchain can disrupt institutions and financial systems. Whether these projects come to fruition or not, attempts to create consumer control on personal data and more self-service options is just the beginning in this journey to overhaul customer experience in the utilities sector. It’s up to senior leadership to decide whether they want to hold back for the next technology breakthrough or seize the opportunity to transform customer experiences themselves.

One of the key hurdles of blockchain implementation is the ambiguity surrounding the Return On Investment (ROI). In a publication by the Capgemini Research Institute, experimenters cite a lack of clear ROI as the main reason hampering its adoption.

Moreover, as mentioned in the 12th edition of the Digital Transformation Review, from the Capgemini Research Institute, businesses should be willing to sign off a digital transformation investment that is based on a set of qualitative returns, as opposed to quantitative. In order to do this and get buy-in from senior leadership, investments must be done on an incremental and agile basis, with releasable Minimum Viable Products.

What next?

As with any new technology, blockchain remains largely unproven, and significant barriers remain. Use cases will need to be more highly developed to convince government-backed programs and regulators that adopting the new technology will help positively drive project efficiency and costs. Common industry standards will also need to be established.

Nevertheless, if it proves reliable and scalable, blockchain technology may ultimately accelerate the transition to what the energy industry calls a “distributed world”, made up of both large and smaller power-generation systems for homes, businesses, and communities.

While there’s always room for start-ups to move in and disrupt this industry, established utilities are best placed to evaluate and make strategic bets on blockchain technology’s potential applications. If they can seize the moment, centralised incumbents may turn out to be the true disruptors, ushering in a new era of decentralised power.



Nayim Zaman

Nayim is a Consultant within the Customer Experience practice of Capgemini Invent who specialises in helping clients to shape, guide and deliver leading edge customer experience and digital transformation programmes through agile delivery.

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