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Nina Bhatia, Commercial Director of British Gas, speaks at Power 2020 event

Good afternoon.

Thank you very much for coming and thank you to James and the team at Power 2020 for organising this timely event.

I’m Nina Bhatia, the Commercial Director of British Gas.

In 2012, I launched Connected Homes, a new British Gas business, created to develop innovative solutions for customers and it’s a subject that remains close to my heart.

Today I want to mainly explore the role innovation is playing in the energy sector and think about whether the UK has the skills and innovation to deliver an energy revolution.

Innovation and competition
But first I want to comment briefly on the first part of the title of this debate, which asks about the break-up of the big 6. I suspect this is being asked in the context of the proposal to refer the energy sector to the CMA for a market investigation.

Let me first of all say that British Gas welcomes the proposed referral to the CMA. We’re committed to an open, transparent and competitive British energy market, and believe that a full and rigorous independent investigation can help to restore urgently needed confidence in the market, both for consumers and investors.

If you look at the facts it’s very hard to argue that this is not a competitive industry.When compared to other countries in Europe, Britain continues to have amongst the lowest retail prices and highest rates of switching.

25 companies now supply gas and electricity to UK homes and 11 accredited switching sites provide a simple ‘one stop shop’ for consumers - driving people to the company and a tariff that they feel is right for them.

I think it’s likely that the energy sector will be referred to the CMA. If so, it’s a process that is likely to last for up to two years and we won’t have remedies and recommendations for some while.

The role of innovation in driving competition and restoring trust
In the meantime, we’re not resting on our laurels. Competition is driving innovation as suppliers strive to compete not just on price, but on service too. We are not innovating for the sake of it, and this is not about designing the shiniest new gadgets or developing expensive technology for the few.

Our starting point is always ‘what does the customer want’ and we use customer insight to determine what innovations customers would find most useful.

So what do they tell us? Predominantly that they view energy in the same way as any other consumer product. Technology has changed and consumers’ expectations are changing with it. Two-thirds of us now own a smart phone and 33 million of us go online every day – and often “after hours”. We are increasingly relying on technology to help make our lives run more smoothly and efficiently - think mobile banking or innovative taxi booking services.

Other industries have been slower. The way customers interact with their energy suppliers hasn’t, until very recently, changed much in decades. We firmly believe making energy work better for consumers should be part of this.

Customers fundamentally want four things: control, convenience comfort and cost-savings. Control is the most important.

We’re a long way off giving our customers that. 10% of people with central heating don’t have a timer and 23% of people who do have a timer don’t use it. Incredibly, 71% of people with a boiler are missing one or more controls.

Creating innovative products and services to help our customers understand and control their gas and electricity use is the focus of British Gas’ residential business today.

By using technology and innovation, we can make our customers’ lives simpler. We can put them in control of their energy and help them to understand where their money is going.

We also believe innovation will play a vital role in helping to rebuild trust with customers. We have already seen signs of this with smart meters. Our customers with smart meters are much happier than those without, with fewer queries and complaints because they now see exactly where they’re using energy and understand how that’s reflected in their bills.

British Gas’ leading role in innovation
I would argue that the energy revolution has already started. At British Gas we’re putting innovation right at the heart of what we do and we are constantly thinking about how we can make our customers’ lives easier. As a result we are now one of the biggest investor in innovation.

I want to just highlight some of the innovations we’re bringing through: I mentioned earlier smart meters, which are putting customers in control of their energy use, and getting rid of the estimated bills that cause so much difficulty for our customers. British Gas is leading the industry in getting smart meters to our customers early, and we’ve installed more than 1.3 million in homes and businesses already. Smart meters will transform the way our customers think about energy and will equip them with the information they need to understand where their money is going and how they can reduce their bills.

We speak to our customers regularly and recently nine out of 10 of our smart meter customers reported that they are already taking simple daily steps to reduce the energy they use.

We’re about to trial smart pay-as-you-go meters, so our customers will no longer need to trudge to the shop in the rain to top up their meter, but will be able to do so online or over the phone.

We’re giving our smart customers Smart Energy Reports, a regular and easy to understand break down of their energy use by day, week and month; by appliance, heating, or hot water; and gives personalised tips on how to bring down their bills.

Ultimately, we’re on a path to itemised billing – and that will create real understanding and control, the lack of which is one of the major causes of the mistrust which beleaguers the industry.

When customers can see their energy use – and the cost of their bill – go down by simply switching off all the gadgets on standby around the house, and see what day they’re using the most energy, they are more likely to change their behaviour and also think about whether their tariff is right for them. So we’re also pressing ahead with time of use tariffs that will help our customers to have even greater control and flexibility, like tariffs for electric vehicles and ones offering free electricity on Saturdays or Sundays. These tariffs are only possible with smart meters, so the two go hand-in-hand.

We’ve also had tremendous success with our Hive Active Heating product which offers a state of the art kit with everything you need to control your heating and hot water remotely - wherever you are and whenever you want. You can do this from your mobile, tablet or laptop. And from your desk, the train, your sofa – or most commonly so far, your bed!

Latest feedback shows that customers are using Hive regularly – 51% of customers say they use it every day: 80% of Hive users say they have recommended it to friends.

We’re also leading the industry in giving our customers new and easier ways to manage their accounts. Our website and suite of other apps are leading the industry with one million customers regularly using them. It’s staggering even for me to realize that two thirds of all of our customer interactions are now digital, and more remarkably, nearly half of those now start from a smart phone. One unique development to recognise that demand is Mobile Energy (ME), as far as I know the first entirely smart phone energy service through which you can join, pay your bills and do everything you need.

The Future Vision
The future of this technology will be the “internet of the house”. Appliances joined up with energy controls ensuring greater efficiencies and greater consumer controls. For example, your coffee machine might switch on automatically when your alarm goes off, or your front door could open automatically when it detects you’re approaching with your mobile phone.

Do we have the skills and innovation to lead an energy revolution?
So, do we have the skills and innovation to the change the relationship customers have with energy?

British Gas has already started the next generation of skills upgrade and our engineers are being equipped with the tools to help consumers control their energy usage. We have over 1,200 British Gas Smart Energy Experts upgrading meters across the country and helping customers understand how to make the most of their smart meters.

We have 182 smart apprentices training in our six academies across the UK and another 56 are ready to start the programme in July.

We are also up-skilling our engineers who are already in the field. Last year our electrical services engineers went back to the academy to train to install Hive in customers’ homes.

British Gas also employs entrepreneurial and tech savvy employees in our Connected Homes office, who are developing innovative solutions for our customers. 70% of hires we made for this business were from tech and product companies.

So yes, the energy sector has the skills, but the industry needs to start thinking like a technology company as well as an energy provider.

I’d like to wrap up by stressing that customers have to sit at the heart of innovation, driving the direction of travel. If we get that right, I believe innovation can continue to transform the relationship customers have with their energy providers, putting them in control, and helping to rebuild trust.

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