The Importance of Proximity in the Energy Sector

The Importance of Proximity in the Energy Sector

Eric Morel 16/12/2019 3

The proximity of energy companies with their customers has been developed historically in some countries, where energy suppliers have remained local (Germany, Switzerland) or even regional (Austria, Finland). These local energy companies today generally enjoy a strong image, a reputation well above average and a strong trust granted by customers. They are seen as legitimate for developing, for example, service activities for which the major national players are sometimes perceived as illegitimate.

This proximity with customers has sometimes been undermined by the liberalization of the energy market. Proximity providers have had to deal with newcomers from elsewhere, making prices their workhorse, less concerned about customer satisfaction or enjoying a more favorable size or access to markets.

The proximity responds however to new societal trends:

– Localization of energy production makes it possible to exploit local resources that are undetectable at the national level and difficult to exploit at this level.

– The development of sharing is based on very local criteria.

– The rise of short circuits.

Proximity makes it easier to respond to increasingly important needs for consumers: 

– The need for services, all the greater as energy is increasingly conditioning our lives, our comfort, the climate and the performance of our businesses. 

– Needs for information and human contacts: this is not the negation of digitalization, but digitalization should not be the negation of human contacts. 

– Local adaptation needs. 

In the past, the proximity has been mainly developed by local energy companies ie medium or small. Today, as we have just outlined, it is a widespread, growing need, to which all energy providers must respond. 

The situation is very ambiguous because all the energy companies are in difficulty with this issue: 

– The biggest, the nationwide energy providers, must deploy a local organization and, above all, give it the necessary autonomy. Engie has put this issue at the center of his speeches for a few years. This movement is all the more difficult to achieve because it calls into question centralized decision-making schemes and overly controlled organizations. 

– The smallest lack the means, in a liberalized context, to assert their assets and must invent new ways of action to remove this constraint. All energy companies that have increased their proximity to their customers are showing very enviable results. 

Proximity is no longer just a customer need to satisfy; this can be a real differentiating factor and therefore a key element of the energy companies’ strategy. 

In this exciting game, I will bet a small piece on local actors because, although the task is difficult, it has less impact on people and organizations than for large energy companies.

Click here to read other articles of the same author. 

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  • Benjamin Holt

    Heartfelt challenge for energy firms.

  • Elliott Arnold

    I admire your dedication to make a change

  • Ryan Price

    Huge respect for you Eric !

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Eric Morel

Energy Expert

Eric Morel is a worldwide recognised expert of energy transition and digitalisation. In the past, he has served as VP Corporate Business Strategy and VP Global Smart Grids and Energy Efficiency at Schneider Electric as well as CEO of Ilevo, a telecommunication start-up. He is a founding member and a former Board member of the Gridwise Alliance, the main professional private/public association dedicated to Smart Energy.

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