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Matching consumer segments to innovative utility business models

An Author Correction to this article was published on 12 March 2021

This article has been updated

Abstract

Energy as a service, smart home opportunities and electrification of heat and transport can lead to new ways of switching supplier or choosing new energy contracts. Here, we used business model collaboration workshops to create archetypes of new utility business models, which were then tested with a representative sample of British energy consumers to explore their attractiveness to different segments of society. We show that some of these segments have a substantial appetite for new business models. However, the segments that choose these models are more likely to be affluent, educated homeowners. Without intervention, innovation in utility business models risks exacerbating existing social inequalities, as lower incomes, lower home ownership and low education result in lower preferences for, or no ability to engage with, new utility business models. We also find that institutional trust beyond the energy sector is a key driver of consumer segmentation.

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Fig. 1: Utility business model archetypes.
Fig. 2: Likelihood of adopting each archetype.
Fig. 3: Consumer segments.
Fig. 4: Probability of adoption of each archetype in each consumer segment.
Fig. 5: Trust across societal institutions by consumer segment.

Data availability

The relevant survey data, including all raw data, generated or analysed during this study are included in the Supplementary Data file. Data generated in the construction of business model archetypes are summarized in the Supplementary Information. The data that support the plots within this paper and other findings of this study are available from the corresponding author upon reasonable request.

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Acknowledgements

This research was partly funded by the Engineering and Physical Sciences Research Council (grant EP/N029488/1), Economic and Social Research Council (grant ES/M500562/1) and UK Research Councils (grants EPSRC EP/L024756/1 and NERC NE/G007748/1) as part of the UK Energy Research Centre (UKERC).

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Authors

Contributions

S.H. led the development of the Utility 2050 research process and led the literature review discussion and conclusions. J.A. led the survey design with input on business model characteristics and question generation from J.H., S.H., C.M., and M.W.; J.A. led the statistical analysis and segmentation exercise. M.W., C.M., J.A. and J.H. contributed substantive analysis, redrafting and editing. Y.M. aided early analysis and drafting.

Corresponding author

Correspondence to Stephen Hall.

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The authors declare no competing interests.

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Peer review information Nature Energy thanks Rachel Bray, Laura Olkkonen and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Supplementary information

Supplementary Information

Supplementary Tables 1–8, Figs. 1–17, Note 1, Methods and references.

Reporting Summary

Supplementary Data

Source data for Figs. 2–5, cluster analysis, trust data, adoption data, raw survey data, data map and data supporting the supplementary figures.

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Hall, S., Anable, J., Hardy, J. et al. Matching consumer segments to innovative utility business models. Nat Energy 6, 349–361 (2021). https://doi.org/10.1038/s41560-021-00781-1

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