Net Zero and the potential of consumer data - United Kingdom energy sector case study: The need for cross-sectoral best data practice principles

Abstract

The nationwide rollout of smart meters marks a significant milestone in the digitalisation of the UK energy sector. It has allowed the collection of unprecedented amounts of consumer energy consumption and behavioural data. Providing real-time, spatially explicit, bi-directional connectivity between service providers and consumers, this data is expected to provide benefits of over £40B and contribute to behavioural nudges - which are integral to 62% of all initiatives required to achieve Net Zero by 2050. Concurrently, consumers are leaving behind digital trails across a broader spectrum of their lives through their smartphones and in-home devices. This data could also be used to accelerate digitalisation within the energy sector and yet the energy sector has limited or no visibility of it. While greater access to consumer data is expected to provide substantial opportunities for economic growth and the realisation of Net Zero both in the energy sector and across the UK economy, it also risks consumer exploitation.This policy perspectives seeks to provide insights from data and digital specialists in the UK rather than just actors within the energy sector. It uses psychographics as a use case to highlight the tension where data, particularly consumer data, is under regulated and siloed across the UK economy. The potential to use consumer data to change consumer behaviour to enable net zero opportunities is explored.The analysis strongly indicates that the ability for high fidelity consumer data to elicit behavioural insight is expected to become an increasingly valuable tool to inform both policy and business decisions in the energy transition - particularly around innovation and enhanced competition. These opportunities are balanced by the fact that high-definition consumer data collection practices are already perceived as exploitative. The lack of data sharing infrastructure across the economy has allowed incumbent technology companies to establish monopoly power thereby stifling competition and raising barriers to entry. The analysis makes a series of high-level recommendations around cross-economy data principles to enhance sharing and stimulate innovation whilst protecting consumer privacy to build digital trust. Options as to how these might be realised are also proposed and should form the basis of future research.