Intelligent grids and interconnected devices are bringing big changes to the energy sector. To stay ahead of its more agile competitors, EDF Energy is fostering disruption in-house at innovation accelerator Blue Lab.
In a co-working space on the south coast of England, Blue Lab works with startups, larger companies and academics to develop ideas for proof-of-concepts for the consumer market.
"We're looking at making a clearer link between the smart data that we're getting, the kind of service that we can offer on top of that and then how that links to connected devices around the home and whether you can make a clear link between those different things," says John Hutchins, who has headed Blue Lab's connected home division since the summer of 2017.
His team's primary focus is on harnessing the power of data analytics to drive business opportunities for EDF and savings for its customers through digital products and services.
In 2015, their experiments were realised in a smart thermostat called HeatSmart. The device was developed with French company Netatmo to help customers save energy by controlling their consumption through an app.
"There are a lot of devices out there and it's yet to crystallise exactly how to go from what our core proposition is which is the tariff and the supply, all the way through to those devices," says Hutchins.
"Via the trust agenda, we wanted to get the basics right first before we started trying to offer the next big thing."
Disrupting the energy sector
For the dominant players in the energy market, the next big thing could be the next big threat
The "big six" energy providers of British Gas, EDF Energy, E.ON UK, npower, ScottishPower and SSE currently supply gas and electricity to just over 80 percent of British households according to the latest report from Ofgem, and treat any digital disruption to their businesses with caution.
Smaller competitors have attempted to decentralise the sector by providing more competition through agile working cultures, data-driven insights and ground-breaking new products. The big six are responding by developing their own innovations, such as Hive, the British Gas subsidiary that produces smart home devices.
Blue Lab is EDF Energy's attempt to embrace safe self-disruption. The accelerator blends the agile innovation offered by external partners with EDF's marketplace of more than 5 million UK customers and the 70-plus years of experience in the sector built up at its parent company, French utility giant Électricité de France (EDF)
EDF has an R&D workforce of 2,000 and annual investment of £500 million, but there will always be more innovation being developed outside of the company than it can generate internally. This makes partnerships a highly efficient route to market.
The collaborative ecosystem allows EDF to benefit from external innovation while giving its partners the financial backing and historical knowledge of the sector that can turn their ideas into commercially viable products.
The success of the Amazon Echo has opened up further opportunities. An estimated 15 million of the home speakers had been sold in the US by September, according to research by Consumer Intelligence Research Partners (CIRP). Early uptake in the UK suggests similar adoption rates on this side of the pond, which could make voice control a compelling new gateway into smart device usage.
EDF has made early inroads into this emerging interface with the launch of the EDF Energy Skill for Amazon Alexa. The service connects to an EDF customer accounts to provide up-to-date information on energy usage whenever they ask their intelligent assistant.
"We were the first energy utility in the world to develop a Skill for the Echo," says Hutchins. "We launched a new tariff a couple of weeks ago which bundles an Echo with electricity supply. We're expecting users to increase as a result of that because there's a link there from the outset."
Read next: Smart meters: A timeline of the UK rollout
His team is also currently trialing a Wi-Fi-enabled in-home display (IHD) monitor for smart meters that will provide access to a great depth of data on energy use as it changes over seconds.
"You can start seeing real-time data away from home, so you're not just looking at your device," says Hutchins.
"You can look at what's going on in your house at any given time from your mobile app. You could easily already see if it's four o'clock and you're expecting your kids home, you can look on your mobile to see if your house is in its restive state or if someone's at home doing something.
“The point for us is that we've got all those meters, the power is there, and with a little bit of incremental investment, instead of just offering a dumb IHD you could put a chip in it and link it up.”
Entering new sectors
Blue Lab has until now focused on energy efficiency and maintenance analytics such as boiler diagnostics, but EDF Energy is beginning to look into the links between energy consumption and other aspects of domestic life.
The Wi-Fi-enabled IHD is an example of how the company could branch out into new services.
"In the Blue Lab we talk about this three-step process of show me, help me, do it for me, and you kind of have to take people along that journey before you're allowed to do the more big-brothery stuff at the end," Hutchins explains.
"Where we're starting with is showing people their energy data, because then once you've shown them their energy data like with an IHD that you've already put in the drawer, the next step to do that is help me."
EDF is currently exploring how it could support assisted living with a trial of a product called Howz. The system combines small sensors in plugs that measure electricity use with motion sensors that calculate movement throughout the home. The results create a picture of the resident's daily routine and can identify any activity that may indicate a problem.
Howz was developed by digital healthcare company Intelesant, which pitched its idea to EDF as it wanted the support of a big utility company. The company spent six weeks in the lab working with mentors and was then taken forward to a trial with 500 EDF customers that is scheduled to end in March 2018.
Other EDF collaborations range from working with solar energy firm Lightsource to develop Sunplug, a solar energy generation and storage system, to teaming up with customer engagement startup FirstFuel to give business customers personalised insights on energy savings.
This work could also have benefits for companies outside of the energy sector. EDF has been discussing business opportunities with insurance providers, whose risk assessment requirements make them among the world's most data-driven organisations.
Banks could also be fruitful partners for EDF, particularly by integrating energy costs into budgeting tools. The banking app could then provide notifications of how energy use is affecting the customer's budget, and suggest alternative practices that could make savings.
"We're trying to think a bit more broadly about how we open ourselves to provide a service where it's of most use to customers," says Hutchins.
EDF's granular insights could bring rich commercial rewards, but customers remain wary about digital intrusion. Not all of them want a machine to tell them they're watching too much TV, eating too many microwavable meals or are in need of some fresh air, as Hutchins acknowledges.
"Smart meters are the first time that systemically you've measured everybody's activities in their home,” he explains. "It's not internet use, it's not what you've watched on TV, it's actually what they're really doing in the home. And that's got some fascinating use cases, but some scary use cases as well. We have to do everything with consent and prove the worth of these things before they open up."