Arab Oil Embargo 40 years ago this week
Oct. 17 marks the 40th anniversary of the start of the 1973 Arab Oil Embargo – an event that arguably launched the United States' ongoing pursuit of a national energy policy.
Forty years ago, the U.S. economy was dominated by fossil fuels (i.e., oil, coal, natural gas) which accounted for 93 percent of the nation's energy consumption. Petroleum – more than 30 percent of which was imported – accounted for almost half of fossil fuel consumption with roughly half used in the transportation sector and 17 percent burned to generate electricity.
In 1973, conventional hydropower generated almost 15 percent of the nation's electricity and provided 3.8 percent of its total energy consumption. Biomass claimed a 2 percent share of the nation's energy use but, like geothermal, provided less than 1/10th of a percent of the country's electrical generation. Energy produced by solar, wind, and biofuels was essentially non-existent.
The 42 nuclear reactors operating in 1973 provided 4.5 percent of U.S. electrical generation and satisfied just over 1 percent of the nation's total energy demand. Four decades later, U.S. energy use in some areas appears to have changed only modestly. Fossil fuels, for example, still dominate and, in 2013, will account for roughly 82 percent of total energy consumption.
However, other energy technologies have experienced significant growth.
Nuclear power has increased nine-fold and now provides over 19 percent of U.S. electrical generation –roughly 8.2 percent of total U.S. energy use.
The mix of renewable energy technologies (i.e., biofuels, biomass, geothermal, hydropower, solar, wind) now accounts for 10 percent of energy consumption, 12 percent of domestic energy production, and 14 percent of net electrical generation.
Perhaps most significantly, major gains in energy efficiency mean that the energy intensity of the American economy today – measured as energy use per unit of GDP – is less than half of what it was 40 years ago.
Domestic consumption of natural gas has increased by 26 percent over the past four decades but remained at about 29 percent of the total energy mix. Its use in the electricity-generating sector has tripled since 1973 and its share of net electrical generation has increased from 18.3 percent in 1973 to 26.2 percent in 2013. (By comparison, electrical generation more than doubled between 1973 and 2013.)
Domestic production of coal has increased by over 40 percent over the past four decades (13.99 quads in 1973 to 19.79 quads in 2013) but its share of the nation's overall energy consumption has remained relatively unchanged (17.1 percent in 1973 vs. 17.6 percent in 2012). Further, its role in electrical generation has dipped in recent years from about 45 percent in 1973 to about 39 percent in 2013, reflecting increased competition from both natural gas and renewables.
Technology revolution for water retailers
In April 2017, the UK’s water retail market in the world opened for business – the single biggest change to the water sector since privatisation. This development allowed businesses, charities and public sector organisations to shop around for the best deal.
However, like any industry, this change hasn’t been without its sticking points; here, Paul Williams, CTO at Everflow Tech (pictured far right), discusses how retailers can harness technology to their advantage
Quotations could take up to a week to produce, billing software had to be manually updated and brokers were unable to manage the complete customer journey in one place – all of which took time, cost money and allowed for human error.
The more complexity that was involved in billing or quoting, the more contact end customers needed to have with their retailers, pushing up the cost to serve for every SPID. This meant retailers – ourselves included – found themselves in a situation where profits were simply eaten up by service costs.
We also note that it can traditionally be hard for retailers to stay on top of balancing what they are charging their customers with what they are being charged by the market. To further exacerbate this, the longer a change goes unnoticed, the more trouble it can be to balance the issue.
It was these issues that Josh and his (at the time) small team wanted to ameliorate, creating their own technology in the absence of anything else.
This technology evolved into our award-winning retail sales, billing and customer management platform for the water retail market, and Everflow Tech was launched as a standalone venture in 2018, selling the software externally for other water retailers and their customers to benefit from.
What retailers want
As a relatively new entrant to the world of utilities competition, the water market could be seen to be lagging behind, particularly when it comes to innovation.
In fact, as recently as 2019, Ofwat said it expected the industry to be making technological advances and to be working with a culture of innovation, collaborating with companies both within and outside of the sector.
And with cost-savings for consumers traditionally lower than for other utilities, retailers need to be offering something more – whether that’s better support, energy-efficiency advice or more accurate data.
What’s more, consumers have had a taste of the power of technology, and they’ve come to expect nothing less from retailers across the board.
Another key issue – thrown into sharp relief during the past 12 months (and counting) of a pandemic – is rising levels of arrears, which are likely to increase bad debt beyond margins that retailers originally allowed for when the market was created.
In such a low-margin industry, there is a limit to the amount of debt retailers can take on, especially as recovering costs can be a very slow process. Ofwat has signalled that this issue could be addressed as early as this year, with a mechanism for recovering bad debt to be established during 2021/22.
The market needs simple solutions to better serve the end user, and we were perfectly placed to develop those solutions. At Everflow, our software is designed for the water retail market, by the water retail market.
As well as simple billing, clear-to-understand workflows, and a revenue assurance system to allow retailers to quickly compare market charges, Everflow has also introduced a complete debt solution, allowing missed payment dates to drive late payment charges and escalations automatically.
Retailers are able to design and put out their own bill and quotes, tailoring customer journey and overall experience – whatever the circumstances.
What does the future hold?
Automation is key to any industry; we’re heading into an age of driverless cars and smart homes, and this drive for tech will filter through to our industry, and we need to catch up.
The Internet of Things – a network of physical objects connected to each other – means human error (and effort) can effectively be removed from many everyday tasks, which goes for meter readings too. However, in the 21st century, the water market is still not leveraging previously emerged technology in the form of smart meters to provide accurate billing.
Consumers are also becoming more empowered, both to ask for information and change their preferences if they don’t like what they learn. Retailers need to be armed with this information, not next week, not tomorrow, but now – and, at Everflow Tech, we’re putting that information at their fingertips.
But the retailers themselves need to speak up too, and we will always work with them to get the best ideas on what needs to be developed and when.
Our strong bond with Everflow Water, along with other key customers, means we have a direct interest in making sure our systems serve the water market in the best way they can.
For us, the goal is to make sure retailers on our platform can grow as much as possible, leaving behind laborious daily processes to focus on their own strategic growth and, most importantly, helping their customers.