By Olivia Baillie
Four leading energy retailing leaders spoke to us about trends in energy retailing, the impact of transition and the best ways to respond to consumers with diverse needs and demands.
- Shannon Hyde, Chief Executive Officer, Simply Energy
- Jo Egan, General Manager, Product and Portfolio, AGL Energy
- Matthew van der Linden, Managing Director, Flow Power
- Ayesha Razzaq, Executive General Manager, Retail, Ergon Energy
Bundling energy as part of a diversified package of products and services
A growing trend in energy retailing is the bundling of services, often including non-energy products like insurance or internet. Customers are seeking great value and convenience whilst also wanting to be rewarded for their loyalty, particularly when they have multiple products and services with the one provider.
As Shannon Hyde, Chief Executive Officer, Simply Energy explains it, “Yesterday’s commodity-only energy products were obviously important, but binary in nature. The new array of services is moving with the times and being designed to better address customer pain points.”
Energy retailers are combining this broader service offering with a simple, digital-led customer experience, and decarbonisation options for homes and businesses. Jo Egan, General Manager, Product and Portfolio, AGL Energy, says they aim to bundle services for more value, convenience, and flexibility. She described the ideal of purchasing multiple essential services, “all in one place, with one provider, in a seamless, digitised customer experience”.
Ayesha Razzaq, Executive General Manager, Retail, Ergon Energy says, “Control and convenience together will be the key ingredients.”
Ayesha predicts that when the customer of 2030 comes home, “they will expect a seamless integrated platform that will help identify when energy prices are at the lowest and manage how and when their EV is charged, how their smart home appliances interact with their solar and battery systems, and for them to have accurate data about all of that at their fingertips.”
Protecting disadvantaged/vulnerable customers without compromising profitability
There is a growing divide in energy consumers, with those able to afford rooftop solar and electric vehicles in a very different position to disadvantaged customers. Accommodating both these groups is one of the challenges of modern energy retailing.
Ayesha says that the division between vulnerable consumers and ‘prosumers’ is likely to grow through the transition, stating that “as the industry moves towards a net-zero emissions future, it’s critical everyone is on the ‘energy journey’.”
She notes that not everyone wants to change or feels they have the capacity to do so. The challenge lies in meeting the needs of this diverse customer base.
Ayesha and Jo both emphasised their organisations are serious about their responsibility to vulnerable consumers.
“Ergon Energy Retail is committed to protecting and supporting vulnerable customers. It’s more than a statement on our website, it’s embedded into our business practices,” Ayesha says,
Ergon’s responses include a dedicated hardship program which proactively assists vulnerable customers to manage energy usage and payments, through customer case management, flexible payment arrangements and community and government partnerships.
Jo echoes this sentiment; “At AGL we’re committed to ensuring we support vulnerable members of the community. We understand that for many of our customers, financial hardship is a reality. We have several initiatives to identify and support customers who are experiencing difficulties in paying due to hardship, and to help our customers manage their energy bills.”
But as Shannon notes, sentiment and goodwill only get you so far. He says that whilst the issue is complex, “there is a central unanswered question of who pays?”
Shannon believes a holistic review is needed, examining what support vulnerable customers require, and how support should be deployed. He says that such a review is long overdue. He is looking for an economic way to deal with non-paying clients that spreads costs and risks evenly.
Satisfying the more demanding prosumer with damaging viability
Ayesha says that Ergon recognises that it cannot be all things to all people, acknowledging that the demanding prosumer may collaborate with other organisations and businesses that have complementary products and services. For her, the ultimate aim is to deliver better outcomes for the customer at a cheaper price, even if that means letting go of some customers.
Matthew van der Linden, Managing Director, Flow Power is happy to pick them up, saying “a demanding prosumer is a good thing. Far from damaging, we know that actively supporting our customers to become prosumers increases our viability.”
Flow Power are actively developing and delivering technology designed to help customers participate and get the most out of their energy, from solar ramp down and live data, to retail products that reward participation in balancing the market demand.
AGL Energy falls somewhere between in its approach. Jo says engaged customers are central to long term growth. AGL has begun “dramatic simplification” of core products, aiming to improve efficiency, enable technology transformation, and reduce complexity for customers. The ultimate aim of this process is to enhance the customer experience and develop new digital-led propositions that meet the needs of the prosumer.
The example she gives is of AGL Energy’s collaboration with OVO Energy. Kaluza is a cloud native energy platform that delivers advanced customer experience and an energy flexibility platform. Kaluza enables vehicle to grid connectivity, so customers can orchestrate the charging of their electric vehicles, manage their energy storage systems and other flexible home devices by intelligently shifting device charging to times of lower demand.
What is the next challenge for energy retailers?
Ayesha says that with 130 authorised electricity retailers in the Australian market, “we all need to carry a healthy sense of paranoia and think about who or what will drive the next wave of disruption in our industry.”
Whilst she can’t predict what the next paradigm shift will be, she offers this advice: “I have learnt that if you are truly customer-centric and purpose led, you can grow in any market condition, whether its good times or turbulent times.”
Shannon nominates the rapid adoption of EVs (potentially placing a battery in every car port in Australia), and the “how and when” of electrification and gas switching for households as issues energy retailers need to plan for.
For Jo, changes to the National Electricity Market are something to keep a wary eye on. “After growing by less than five percent in the last two decades, electricity consumption is forecast to grow by 23 percent between now and the end of the decade.” She attributes this shift to technologies such as smart and connected devices, electrification including electric vehicles, competitive and reliable renewable power and decentralised solar and battery energy resources.
But this has not dulled her ambition, proclaiming that AGL Energy will be pursuing “net zero at home and on the road for every Australian.”
It seems likely she speaks for all our interviewees when she says that there needs to be an absolute focus on decarbonisation, the path to net zero and a commitment to supporting energy customers through the energy transition.
Hear from Shannon Hyde, Jo Egan, Matthew van der Linden, Ayesha Razzaq and a host of energy leaders in the Future Retail stream at Australian Energy Week.
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