The energy retailer of the future

Origin Energy
Wednesday, 15 February, 2012

In the quest to become more energy efficient and reduce our greenhouse gas output, the question of whether we can rely on energy retailers to help us in this journey is often asked.

Some of the analogies I’ve heard are that it would be like asking a cigarette company to help you stop smoking or a fast food restaurant to help you lose weight. This is an unfortunate perception because, unlike the comparisons mentioned, the reality is that energy-efficiency services have the potential to provide energy retailers with more revenue growth than energy sales alone. In essence, energy retailers can improve their bottom line by teaching their customers how to use less of their core product. Perhaps this seems like an oxymoron, but the reality is that even though energy-efficiency services may erode some of the total energy usage, it also has the potential to improve the customer relationship, meaning energy retailers can have more customers each using less energy. It also helps transition to a future where power is more than just a commodity.

Many businesses seem to view power purely as a commodity and don’t differentiate whether they get it from a retailer or a broker.  As a result, consultants and brokers seem to have prospered in recent years because of their perceived independence. However, it is logical that this also leads to a lack of influence over the outcomes delivered by the retailer. And while commoditisation can lead to good prices, it won’t deliver solutions to the complex problems faced by many companies today. I believe that energy will need to transition more and more from a commoditised product that businesses purchase based on price alone to a unique product that businesses value based on an array of services provided, including energy management software and energy-efficiency services.

In addition, a greener future will most likely have to include innovations that change the way we’ve historically interacted with our power systems. Exactly what technologies will take hold is somewhat of a guessing game at this point. One thing though, which I do think is important throughout this transition, is to take advantage of key areas where energy retailers are especially poised to help grow greener technologies faster. Like the vast collections of data that can provide insights to help businesses pinpoint how they operate in comparison to similar businesses in similar climates. They also already have billing systems in place that can be leveraged in relation to real-time usage monitoring, allowing for the quick implementation of energy management programs, rather than having to build structures from the ground up.  And for more pioneering changes, like precinct heating and cooling where energy is directly shared between buildings, energy utilities can utilise their existing billing and engineering staff and not have to create a new team in order to trial such technologies.

So, what exactly will the energy retailer of the future offer? I believe energy-efficiency services and energy management software, if they’re not already available, will definitely be offered. In addition, new services will emerge, like distributed generation, new appliance offerings or services like hot and cold water from a thermal network. Regardless of what the technology is specifically, if your energy retailer is offering to help you reduce your energy use I wouldn’t be apprehensive. They’re just trying to grow and maintain their business in a changing market.

Jennifer Baltatzidis has a Bachelor of Science and Engineering in Bioengineering from Arizona State University.  She currently works as a Principal Consultant in Energy Engineering at Origin Energy. Her career in the power utility industry includes distribution design, power plant engineering and renewable energy, with an extensive background in power plant energy-efficiency management.

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