This is the third post of this series exploring the digitalization of the energy sector under way. The first post explored the large scale disruption against the internet’s journey, and the second post made the case for the shift in the value delivery and service model. Here we make the case for what it takes to design the new energy relationship, and why the organizations that get it right will own this transition the way the early internet’s service-model winners owned theirs.
It’s 5:45pm on a busy weeknight. The grid forecast shows high demand between 6 and 7pm, so the algorithm initiates a Virtual Power Plant (VPP) dispatch window to call on energy reserves stored in home batteries across its service area. Before the dispatch fires, it checks members’ dispatch preferences. One member adjusted her preferences three weeks ago when her schedule shifted. Dryer: yes; induction stove: no.
The dispatch fires. The dryer pauses, but the stove keeps running. Her phone dings: "Battery dispatching now. Dryer paused; will resume at 6:45. Dinner uninterrupted." She glances at it and goes back to cooking.
Inside the organization at 6:00pm: the dispatch record includes not just which assets fired, but which devices were protected and why. Her preference is part of the event record. Customer Service can see it, so if she ever calls, the rep doesn't have to guess.
6:45pm. The dryer resumes. The app notification reads: "Event complete. You contributed 4.2 kWh, roughly a 20 mile drive. You earned $2.40."
Inside the organization the next day, her preference data has already done something else. The program team's aggregate view now shows that 47 percent of members with induction stoves protect them during evening dispatch windows. No survey or focus group required, just thousands of members setting their preferences during onboarding for the organization to know that dinner is the line. Design around dinner.
This insight informs the next dispatch window, and changes which assets the algorithm reaches for and when. It streamlines how the next member cohort gets onboarded. And it changes what marketing says about the program, moving from "we'll manage your energy" to "you tell us what matters, we work around it."
That scenario can, and often does, go very differently. Mid-cycle, the dryer stops unexpectedly. No notification on the app, so the member calls in. The program team sees participation rates from aggregate dispatch data, marketing is drafting a post to share the story about how members helped keep the lights on during yesterday’s peak event. But customer service just sees the programs she’s enrolled in, not her dispatch record. Inside the organization, the same event is interpreted four different ways, by four teams that aren't talking to each other. The technology for routing signals existed, the organizational capacity to act on them doesn't.
In these scenarios, the dispatch algorithm is the same in both versions. What's different is that the organization established the capacity to process the data, and someone designed the line from what the organization knows to what the member experiences.
The Three Layers of the Service Relationship System
Energy suppliers spent a decade collecting data and building internal analytics. Now that data is flooding a distributed ecosystem of members, devices, and third parties. The question is not "how do we message better?" or "how do we make the app easier?" Instead, the three following questions help map out the relationship and how to activate value throughout the system: What are the things involved and what do they need to accomplish? Do all involved have the capability to complete those activities or processes? Do all involved share baseline meaning of what’s taking place and why?
Things
Energy has always been a complicated system of parts and players and policies. Today, it’s increasingly complex. The app, the smart meter, the battery, the EV charger, the enrollment form, the dispatch notification. These things are much more than isolated just touch points. They’re players in the journey carrying important information with a job to do. Think of it like nutrients moving through a watershed.
For energy customers, the enrollment form creates a preference record that has to persist and be readable everywhere they are represented. Not just where they interact, but wherever the system hold a version of them. The dispatch event is an operational log, and it’s also a record of interactions across the system that operations, program management and customer service each need something different from.
Organizations that invest in just the “thing” or the touchpoint are leaving value on the table. Transactions move through the app, the battery, but value struggles to accumulate. Like nutrient runoff in a watershed that never gets absorbed. Investing in the journey of these “things,” the information they carry, and the jobs they needs to do at each step accumulates new types of capital, including customer trust and organizational capacity.
Competencies
The same information carries different value for different parts of the organization, and sometimes even in the same part of the organization depending on the format it arrives in. Just like nutrients serve different processes at different places in the watershed. Information needs to be activated in context for it to carry value. Competency isn't abstract knowledge, it's the ability to work with specific _things_ in specific contexts.
Competency lives on all sides of the relationship. Customers are being asked to generate energy, manage consumption in real time, and trust a new kind of relationship that, until now, never required their active participation. New energy prosumers don’t automatically know how to do these things, so the customer who doesn’t know what her battery dispatching means will stop trusting it, and the one who can’t read his bill will call in confused. Taking the technically brilliant South Australia VPP as an example, though the grid saw benefits, when researchers asked participants what held them back, the top barrier wasn't cost or technology. The barrier was “_I don't know what's happening to my asset, and I don't know who benefits.”_
The same challenge applies inside the organization. A dispatch event that no one can account for, that doesn't appear in customer service's system, that marketing never sees — did it happen, organizationally? It happened physically. But the value, the nutrient, wasn’t absorbed. The intelligence infrastructure isn't just how an organization knows things. It's how it counts it as real, what it can act on. A staff member who has a member account but not their preferences or the specifics of a dispatch event can’t activate the information the organization already has.
The two sides mirror each other. The loop breaks not because people lack training but because they lack the infrastructure (the technology, yes, and more importantly, the organizational capacity) to translate the value across the organization and the service relationship. These are legibility gaps. They close by aligning what the organization knows and how that knowing travels and activates.
Meaning
When launching new energy programs (or any service where a profile or user identity matters), does the customer end up with something that tells her who she is in this system? Does the organization understand its role in creating and honoring who she is the system?
Take the role of the customer. She’s not one thing in the operational system. She’s a billing account in one place, a meter address in another, a ticket history in customer service, a load asset in dispatch. Each part of the organization has a different partial version of her, and no single one of those includes captures her as multi-faceted a VPP participant with preferences, history, and earned value. With DERs, that fragmentation plays out at scale. Organizations can ask the operational question, “can we unify the schema?” But to answer that question, we have to answer, “which version of this person does the organization activate?”
If the canonical representation is "meter address with a billing account," the organization is unable to treat her as a prosumer. The dispatch system can interrupt her dryer because in its representation, she is a load, not a person with a standing preference that dinner is the line. Her identity inside the system — who she is to the organization — is constructed from which pieces of data come together and what meaning they make. She's either a participant with a history, a relationship, a contribution on record, or she's an account number attached to a bill.
The member is only as real to your organization as your data model and organizational ability to interpret it allow her to be. Right now, most organizations have built organizational processes and capabilities around a data model for a passive ratepayer, not an active participant.
What does it mean to be a participant in this system? What does it take to enable one? It's what Octopus Energy has by a clear margin above others: a coherent account of membership that compounds across every interaction, and the organizational capacity to activate it. The result: Ofgem's most recent satisfaction survey put Octopus at 90% of customers satisfied against an 82% market average, the highest any supplier has scored since the regulator began tracking in 2018. We’ll talk more about this below.
Looking Beyond The Technology
These aren’t three sequential steps; the layers create a system. Things are created by material arrangements and carry the data that makes the relationship possible. Competency is the capacity to work with those things, to route them correctly, interpret them accurately, act on them in the right moment. Meaning is what they produce in transit across the organization, when they arrive at the member in a form that tells her who she is in this system, what she's part of, and why it matters.
When any layer breaks, the whole chain breaks. Things that don't travel produce organizations that can’t deliver. Things that travel but fail to render produce organizations that are operational, but don’t accumulate lasting value. And organizations that try to build meaning without the things and competencies underneath it are producing marketing, not a service relationship.
Take Octopus Energy. An organization can license all the data its Kraken platform offers and still produce none of the outcomes Octopus produces, because the platform only enables the capability, it doesn't create it. Someone still has to design the enrollment flow for both the customer and the part of the organization that creates a persisting preference record. Someone still has to make the member's contribution visible to the rep taking her call. When all three layers work, you not only create better programs, but a compounding stock of trust and organizational capacity that makes every future program cheaper to run and easier to fill. That's what the watershed accumulates.
The technology is available. The data exists. What most organizations haven't built is the capacity to move it through. To turn the dispatch record into a conversation, to turn the preference object into a protected stove, to turn the earned value into a relationship rather than a line item. The transition to a distributed, non-deterministic system requires an organization that can read a situation and act on it in context. Any organization absorbing technology that changes who its users are faces the same gap. The data exists, the organizational capacity to activate it doesn't.
To close this series where it began, we come back to the internet. The arc of the internet offers lessons for the energy moment we are in now: there are those that captured infrastructure, and those that figured out the relationship that made the infrastructure meaningful, understanding before their competitors did what it would fell like to use what was being built.
Energy is at a similar fork in the path now, with multiple visions of the energy future competing. The visions differ, but most are placing infrastructure bets and tot few are placing relationship bets. The gap is a design opportunity, and it’s one that determines whether this transition produces programs people trust and stay in, or programs that are technically brilliant and socially brittle.
Either way, these new service relationships are creating entirely new energy futures. The internet introduced a new understanding of exchange, and the energy transition will take that to the next level, starting with what expanded participation in the grid means. The organizations that designs this well is world-making, not just service-improving. And as the internets arc showed (and the first post argued), these technology platforms can veer easily towards net extraction versus net value creation. Whether an organization can make sense of the opportunity and resist that path dependency is a strong signal of which way it will go.
The organizations that get the three layers of the service relationship right — whose things travel, whose people can act on what they know, whose members experience themselves as participants rather than accounts — aren't just running better programs. They’ll be in a structurally different position when this window closes than the ones who start two years from now.
The structural decisions about who owns the energy relationship are being made, often by default, while attention stays on the technology. The organizations that pause to ask what the relationship should be and build the capacity to deliver it are the ones that will own what comes next.
You're rolling out several new programs simultaneously that ask members to change behavior, make investments, and trust in new ways. Does that experience hold together? Does your organization have the capabilities to orchestrate the relationships these programs make possible? At WHOLE Innovation & Design, it’s the conversation we think is worth having.
*Header image by Yutong Liu, from betterimagesofai.org
