Power companies less trusted by consumers than banks, telcos

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Survey finds Australian consumers’ lack of trust in power companies holding back the shift to a smarter, cheaper grid.

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One Step Off The Grid

A deep and widespread lack of consumer faith in Australia’s electricity industry is creating a major barrier to the uptake of smart energy technology, a new study has revealed.

A survey commissioned by global smart meter maker Landis+Gyr, and conducted by Essential Research, found that more than two-thirds of consumers had either ‘no trust’, or ‘not much trust’ in power companies.

The finding, which included 32 per cent of respondents who “had no trust at all,” puts power companies behind the media, banking, mining and telco, in terms of public standing.

This lack of trust, compounded by a lack of knowledge, comes at a time for the industry where the collection of consumer data through smart meters will be crucial to the efficient management of the grid.

In particular, smart energy technology will be vital to harnessing the growing number of rooftop solar and battery storage systems being installed around the country, and to ensuring that they benefit all consumers, and not just those who can afford those technologies.

Smart meters should be a win for consumers, too, helping them to better control how and when they use energy, and to monitor their appliances for efficiency.

But the survey, the results of which were published in a report on Monday, found that customers are cynical about the share of benefits they might get from things like smart meters, compared to the companies that have control of them.

“There are high levels of cynicism among consumers about the behaviour of corporations and the benefits to consumers that flow from technological change,” the report said.

“Trust in corporations, particularly around their handling of consumer data is low. Consumers naturally wonder whether new technologies are put in place to benefit consumers or merely to assist in cost cutting, marketing and greater oversight of our behaviour.”

According to veteran energy industry executive George Maltabarow (Energy Australia, Ausgrid), this cynicism has been compound by the clumsy state-wide rollout of smart meters in Victoria.

“The Victorians had the very worst of every possible world,” said Maltabarow in an interview with RE.

“They devised a system that had all the wrong incentives. …Retailers weren’t equipped to make the most of it, ….(and the networks) continued to over-build infrastructure.

“Even then, the Victorian government in their wisdom made sure the cost was put on people’s bills. And when the consumer asked, ‘what am I getting for this? The answer was: a donut. Nothing.”

Maltaborow, who is an ambassador for the Landis+Gyr research project, said that since the Victorian smart meter debacle, he has seen consumer cynicism grow alongside rising electricity prices.

“There’s this suspicion that smart meters are a plot by energy companies,” he said.

“You’ve got to get products out there that win the trust of customers.”

The good news from the survey, however, is that consumers are keen to take part in the smart energy revolution, as long as they get more information and control in return.

Almost 70 per cent of respondents said they wanted energy companies to supply them with more information to better understand and control household energy use.

And most consumers (88 per cent) said they would like to be sent alerts by their energy company when usage data suggested they had a faulty home appliance.

A similar number (85 per cent) said they wanted energy providers to recommend ways of reducing costs based on their personal energy use patterns.

This extends to energy consumption data for specific appliances, with 85 per cent wanting to know how much energy their air conditioners, pool pumps or dishwashers were using.

The report also found while technology had made significant advances, there was a growing gap between what consumers could do to reduce their bills and energy footprint, and what they were actually doing.

“Bridging that gap emerges as a critical challenge to the ability of the national energy market to manage prices, supply and sustainability,” the report said.

“If we get it wrong, smart meters will represent a missed opportunity for the energy sector. If we get it right, we will be assisting consumers to become more active energy citizens.”

For Monique Spanbrook, who is general manager of marketing and communications for Landis+Gyr Australia, New Zealand and Asia-Pacific, the biggest take-away from the survey was that more education on what smart meters can do for customers would not only encourage uptake, but reduce cynicism.

“If you’re going to put it in their home, but not offer any incentives or upsides, then of course they won’t feel inclined to engage.

“But if you inform the customer that you could, one day, know how much each of your appliances are using, and make decisions around that, then you will get a different response,” Spanbrook told RE.

“That’s really the information we’re keen to get out there,” she said.

“We need to ensure consumers are aware of the benefits that smart technologies offer, including how they allow for more control over energy use and the impact on energy bills,” added Maltabarow on Monday.

“This level of control benefits the electricity grid and reduces the need for further investments in costly network infrastructure upgrades to manage peak loads.

“Ultimately, this will lower the cost of electricity bills for homeowners, creating a win-win situation for everyone.”

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.

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5 Comments
  1. Chris Drongers 4 months ago

    No comment from dominant electricity retailers as to wether consumer distrust is a problem or not?

    • MaxG 4 months ago

      They do not care; people switch like crazy whenever they hear another discount story, just to fall prey to the likes of Origin first raising the price above standing offer, then announcing ‘we freeze the price for a year’.
      This is true Orwellian NewSpeak: we increased the chocolate ration from 33 to 28 per cent.

  2. Joe 4 months ago

    I couldn’t see ‘Used Car Salesman’ on the list. Yes, I’m being sarcastic.

  3. MaxG 4 months ago

    “Smart meters should be a win for consumers” — this is a key statement, which has two answers: a resounding YES and NO.
    It will be a win for the consumer, IF they solely hold and control the data; it will be a determined NO, IF the data is available to the energy company. The latter will use it to maximise their profits, which in turn means by necessity increasing the cost to the consumer.
    This — the actually custody of any personal data — is the major reason in Europe for people hesitating in adopting the cloud for any personal data (e.g. home automation, sensors, etc.), in particular with the population older than 30 years old.

  4. lin 4 months ago

    Like a criminal cartel, they have colluded with neoliberal “privatise everything” governments to bleed us dry for years, expatriated billions in tax free windfall profits, let some infrastructure run down causing bushfires and blackouts, unnecessarily gold plated other infrastructure and charged us an exorbitant rate for the privilege, cut off the poor and financially distressed at a whim, and perpetually bullshitted us at every possible opportunity. They have given us some powerful reasons to dislike them.

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