Monday Feb 06, 2023

Everyone wants a piece of $1.9trn renewable energy opportunity – The Australian Financial Review

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A flurry of companies have recently registered to become electricity retailers.

Since June 2021, the Australian Energy Regulator has received 13 applications from companies to become electricity retailers, such as Ampol, Telstra, the CBA-backed disruptor Amber Electric, and the Mike Cannon-Brookes backed green financier Brighte.

Mitchell O’Neill is Head of Strategy at UPowr and Principal Consultant at Grids. 

These entries are underpinned by the insight that customers want more from their energy plan than just a great rate. They want assets, control, financing, a bundled price for multiple services (including energy) and the ability to optimise their plan towards specific energy outcomes.

Age of electrification dawns

Incumbents are also adapting. A key pillar in Origin Energy’s recent strategy refresh was the orchestration of customers’ energy assets and devices.

Their current platform, Origin loop, orchestrates over 100,000 connected services resulting in 205MW of capacity, and they’re aiming to expand that number to 2000MW over time. They believe this platform “creates lower churn, deeper engagement and seeks to fulfil customers’ expectations for lower costs, decarbonisation and energy autonomy”.

The challenge for these new ventures is managing this complex and changing landscape in a simple way for customers.

Until the 2010s, a consumer’s relationship with electricity was one-way: they flick a switch, the lights turn on, and a bill arrives in the mail.

As rooftop solar adoption took off, they then had to select the right system, pair it with a suitable energy plan, and navigate new things, like tariffs to provide energy back to the grid. This was the beginning of an increasingly complex grid, rife with information asymmetry for consumers.

As the age of electrification dawns, where personal transport and household appliances are increasingly drawing from rooftop-generated or battery-stored energy, when, where and how we use energy will rapidly evolve.

Consumers will need to be educated and incentivised to use power more flexibly, and the nature of energy products and offerings also need to evolve.

When customers consider new energy products and services, they’ll need answers to questions like; how does this work with current or future products I have? What are the financial and environmental impacts of this purchase? How can I be sure this works, and who do I contact if it doesn’t? After purchase, the installation and ongoing support provide both challenges and opportunities to create compelling experiences.

Era-defining energy transformation

As electrified devices such as solar panels, batteries, and electric vehicle chargers get smarter, installation complexity increases. This creates a need to resolve that complexity on the customer’s behalf through pre-emptive issue detection, integrated products, and five-star service.

And the software that connects them will be essential.

These new requirements are driving the rise of integrated energy offerings, that connect energy assets, retail plans, financing, and maintenance in a single, personalised offering for the end consumer. For example, Commonwealth Bank has made an initial entry with their green loan program for household energy products such as solar, batteries and heat pump, in addition to their strategic investment in energy retailer Amber Electric.

Others have gone further, such as solar and battery manufacturer Hanwha Q CELLS, who has launched Arcstream, which offers solar and batteries on a fixed rate energy plan with optional financing.

With the variety and uptake of integrated energy offerings …….

Source: https://www.afr.com/companies/energy/everyone-wants-a-piece-of-1-9trn-renewable-energy-opportunity-20220407-p5abi6

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