Arthur D. Little x Enode Viewpoint: Scaling residential flexibility
Residential flexibility in Europe could unlock €24–€58 billion in value every year. The technology to access it is increasingly available. The harder question is how to turn that potential into propositions that millions of households actually want to use.
That is the focus of a new Viewpoint on Scaling residential flexibility, co-developed by Arthur D. Little and Enode.
The starting point is simple. Most households do not want to become active participants in electricity markets. They want lower energy bills, a charged EV, a warm home and confidence that their devices will work when they need them. Successful flexibility propositions need to start there.
From technical potential to customer propositions
Based on Arthur D. Little’s industry expertise and Enode’s experience working with more than 150 energy retailers globally, the viewpoint explores what it takes to commercialize residential flexibility at scale.
One of the clearest findings is the importance of predictable value for consumers. The report looks at three emerging tariff models: time-of-use, type-of-use and dynamic tariffs. Type-of-use tariffs are gaining traction as a mass-market model because they can give households predictable, device-specific savings without requiring them to manage consumption against changing hourly prices.
Enode deployment data shows what that can mean in practice. At one large European energy retailer, EV connections increased 17-fold in the three months after it introduced a type-of-use tariff, compared with the previous period when only a dynamic tariff was available. The customer base and brand stayed the same. The proposition changed.
Scaling requires more than technology
A good proposition is only part of the equation. Retailers also need the capabilities to forecast and dispatch flexibility reliably, and an operating model that aligns retail, IT and energy management around the same customer promise and economics.
The Viewpoint sets out four priorities for companies looking to scale: meet customers where they are, select propositions that can scale, make deliberate choices about how flexibility is monetized and align the operating model behind it.
Read the full Arthur D. Little and Enode Viewpoint here.