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Are your billing issues coming from energy suppliers’ old and inflexible systems? Tom Hedges April 9, 2024

Are your billing issues coming from energy suppliers’ old and inflexible systems?

From time to time, shocking headlines reveal the excessive charge energy consumers are being billed for in error. For example, there’s the case of a holiday park owner that was billed £244,000 for a single month – 100 times more than his usual bill. No business owner wants to deal with the shock of seeing such an amount debited from their account.

Subpar energy billing systems are often to blame for such errors. While overcharges are not always as dramatic as the above, outdated systems often cause more subtle inaccuracies which build up over time and eat into profits.

They also increase the risk of non-compliance with emissions regulations as businesses are left with incorrect or outdated consumption data.

In this article, we’ll review how the energy market has changed and why older billing systems are no longer fit for purpose. And – most importantly – what can be done about it. So, join us as we explore the issue in depth.

The Evolution of the Energy Market

The energy sector has seen significant transformations in recent decades, especially with the advent of smart meters, the integration of renewable energy sources, and the adoption of dynamic pricing models.

These innovations promote energy efficiency and sustainability while offering consumers more control and insight into their energy usage. However, the transition has shed light on the outdated nature of traditional billing systems.

The Problem with Old Energy Billing Systems

One of the main problems with older systems stems from their inability to handle real-time data. Other than that, the overall lack of automation leads to inefficiencies and manual errors. What does this look like in practise?

Underutilisation of Smart Meter Capabilities

Smart meters are designed to offer detailed insights into energy consumption patterns, allowing for more precise billing. However, legacy systems often rely on periodic, manual readings, leading to delayed and sometimes inaccurate billing.

In other words, the inability of legacy systems to handle this real-time data undermines the potential of smart meters.

Inefficiencies in Dynamic Pricing

Dynamic pricing models require real-time data to accurately reflect current market conditions. Legacy systems that cannot process data in real-time are therefore ill-equipped to implement dynamic pricing effectively.

This limitation prevents consumers from taking advantage of potentially lower prices during off-peak times and hinders efforts to balance energy supply and demand.

Delayed Response to Energy Consumption Changes

Without real-time data processing capabilities, both providers and consumers are left without immediate feedback on their usage. Consumers then lose the chance to adjust their energy habits promptly but with real-time data, they could leverage dynamic pricing, for example.

Increased Administrative Burden

The need to manually process and interpret data for billing purposes increases the administrative burden on providers, leading to higher operational costs and the potential for human error.

The Impact on Customers and Suppliers

For business, the repercussions affect not just their profits. Inaccurate consumption data can result in underreporting or overreporting energy use, risking non-compliance with emissions regulations that depend on precise data to calculate a company’s carbon footprint.

Without real-time data, businesses may miss opportunities to identify and address excessive energy use promptly, preventing their ability to mitigate the risk of non-compliance.

In addition, the limited support for renewables that some legacy systems have can discourage businesses from investing in or fully utilising renewable energy, further hindering their efforts to reduce emissions and comply with sustainability targets.

Energy suppliers, on the other hand, face operational headaches and reputational risks. Persisting with outdated systems can lead to increased administrative costs, strained customer relationships, and a tarnished image.

Customer retention may suffer as a result, as they flock to competitors that are more flexible and can better serve their needs (and protect their profits).

How Does Technology Solve the Problem?

To overcome the challenges caused by outdated systems, we must look to modern technologies that are built to withstand the demands of today’s energy market.

Cloud Based Platforms

Cloud based software allows providers to make the most of innovations such as smart meters, providing a more convenient and personalised experience. Many modern systems also offer customer portals for self-management and greater transparency.

Here are more benefits the cloud provides:

  • Real-time data processing: Cloud technology is what makes it possible to immediately capture and securely store data on energy usage. With a population of more than 66 million continuously generating such data, robust, cloud based systems are key for accuracy and timely data processing.
  • Analytics: The robust data-processing and storage capabilities of the cloud underpins powerful analytics software that provides invaluable insights into energy use.
  • Scalability: Cloud based software easily scales to accommodate growing data volumes and customer bases without sacrificing performance.
  • Integration capabilities: Modern systems can seamlessly integrate with smart meters and other IoT devices for accurate, real-time energy usage tracking. They can also integrate with other software systems to streamline business processes on the whole.
  • Data backup and recovery: Cloud software automatically backs up data, reducing the risk of data loss and facilitating easy recovery.
How Utilities Management Software Improves Consumption Monitoring

Estimates by the World Economic Forum state that digital solutions, if scaled across industries, could deliver up to 20% of the emissions reductions needed to meet 2050 targets. Among the technologies considered included “decision-making technologies that augment human intelligence” – which includes analytics tools.

We offer a cloud based analytics platform and portfolio management tools to help businesses track and optimise their consumption. We validate the invoices from all your suppliers, which involves checking every pass-through charge, such as government levies and distribution network charges. (To be precise, 77 validation checks take place every month.)

If errors are found, customers can take the steps to resolve the problem – or, they can use our Bureau Services and have our analysts handle that on their behalf.

What’s more, our robust reporting tools lay the foundation for ESG reporting, in compliance with the Streamlined Energy and Carbon Reporting regulations.

How Does AI Optimise Energy Consumption?

Artificial Intelligence (AI) significantly enhances analytics through advanced pattern recognition, among other capabilities that enable more insightful decision-making.

Machine Learning algorithms excel at identifying complex patterns in large datasets that might be invisible to the human eye. This can reveal trends, correlations, and anomalies, facilitating deeper insights.

For example, when conducting sustainability planning, AI-powered analytics can provide deep insights into areas of energy wastage and potential strategies for improving energy efficiency.

How Does Blockchain Improve Energy Billing?

Blockchain has great potential to improve the accuracy and efficiency of energy billing. Here’s how.

Immutable Records

Once a transaction is recorded on the blockchain, it cannot be altered or deleted. This ensures that energy consumption data, once entered into the blockchain, remains accurate and tamper-proof. This has the potential to significantly reduce billing inaccuracies.

Real-Time Data Recording

Blockchain allows for the real-time recording of energy usage data directly from smart meters to the blockchain ledger. This reduces the lag time and errors associated with manual data handling.

Automated Billing Through Smart Contracts

Smart contracts are self-executing, the terms of the agreement directly written into lines of code. When it comes to energy billing, these contracts can automatically trigger billing transactions based on real-time consumption data recorded on the blockchain, streamlining the billing process and reducing administrative overhead.

Incentivisation of Renewables Adoption

Blockchain could even incentivise the adoption of renewables by providing the means to effectively record and trade renewable energy credits. For billing systems that incorporate such incentives, blockchain would ensure the accurate tracking and rewarding of green energy usage.

Conclusion

This pressing concern of overcharges not only aggravates customer dissatisfaction. It also highlights a growing disconnect between technological advancements and the outdated infrastructures that some energy suppliers continue to use.

But you don’t need to wait for your suppliers to upgrade their tech stack before you reap the rewards of greater accuracy. Instead, our software can validate your energy data and provide detailed insights that help ensure you’re always compliant. To learn more or request a demo, contact us today.

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