Speaker 1: Cura and welcome to Shed Lunch, brought to you by Cheesy's.
Speaker 1: I'm Helen Mattison. Today we look at the perspective of
Speaker 1: the UK's fastest growing energy supplier, Octopus Energy. We ask
Speaker 1: what in roads has Octopus made since it's been here
Speaker 1: in New Zealand, does the electricity sector allow for fresh
Speaker 1: competition and how much will technical innovation helps solve our
Speaker 1: power problems. In a moment, I'll be joined by Octopus
Speaker 1: Energies Chief operating Officer, Margaret Cooney. But before we get started,
Speaker 1: here's some important information.
Speaker 2: Investing involves the risk you might lose the money you
Speaker 2: start with. We recommend talking to a licensed financial advisor.
Speaker 2: We also recommend reading product disclosure documents before deciding to invest.
Speaker 2: Everything you're about to see and here is current at
Speaker 2: the time of recording.
Speaker 1: Welcome Margaret, love you to have you in the studio.
Speaker 3: Thanks for having me.
Speaker 1: Now, before we dive into who Octopus it and what
Speaker 1: you're doing here in New Zealand, let's look at your
Speaker 1: background from what I can gather. For about twenty years
Speaker 1: now or probably more, you've been in the energy sector
Speaker 1: and various guys. As I think you started off as
Speaker 1: an analyst in the market and regulatory scene. You've worked
Speaker 1: for Meridian, Powershop Electric, I think you consulted for in
Speaker 1: the like and obviously a big stunt in the UK.
Speaker 1: What is it that fascinates you about the electricity sector
Speaker 1: or the energy sector.
Speaker 3: Look, I think that electricity sector is really interesting and
Speaker 3: obviously underpins our economy, so I think that's you know,
Speaker 3: that's important to me that it's a really well functioning sector.
Speaker 3: But also we're in this phase of significant change, so
Speaker 3: the economics of energy are changing significantly. The need to
Speaker 3: decarbonize our economy is really important, and I think it's
Speaker 3: a fantastic growth opportunity. So it's a really interesting sector
Speaker 3: to be a part of, and I feel really fortunate
Speaker 3: that I've had some amazing opportunities in the sector. So,
Speaker 3: you know, early on in my career I was involved
Speaker 3: in setting up power Shop, which was a very innovative
Speaker 3: company and really bought the benefits of smart meters that
Speaker 3: have just been put into many New Zealand homes, brought
Speaker 3: those benefits through to consumers for the first time. But
Speaker 3: I think that early experience of doing things differently, of
Speaker 3: driving change, you know, that's something I've tried to continue
Speaker 3: in my career as well. So that leads us to Octopus.
Speaker 1: So give us an idea of how long you've been
Speaker 1: here and really what's your point of difference.
Speaker 3: Yeah, so Octopus has been in the New Zealand market
Speaker 3: since twenty twenty. We initially set up here to service
Speaker 3: a bunch of technology projects in the APEC region. So
Speaker 3: we've actually we've got a team of about one hundred
Speaker 3: and fifty in New Zealand and the vast majority of
Speaker 3: them don't work on anything to do with New Zealand.
Speaker 3: They're actually providing support to our operations globally. Or there's
Speaker 3: a team KRACKN that's increasingly separate from Octopus now who
Speaker 3: are helping transform energy businesses in the APAC region. Some
Speaker 3: of them are working on the Meridian project close to home.
Speaker 3: So yeah, we have a few things going on. We
Speaker 3: have a small retail business as well of seven thousand customers.
Speaker 3: We would love to grow that, but we've been very
Speaker 3: clear that the current market settings don't work for us
Speaker 3: to grow that. So it's been experimental, I guess today.
Speaker 1: So we look at the backers of the company to
Speaker 1: it's a private company. The parent being obviously in the UK,
Speaker 1: you've got some big backers like Origin Energy, which is
Speaker 1: out of Australia. There did You've got Tokyo Gas, who
Speaker 1: I think you're working with to deploy octopercentergy in Japan?
Speaker 2: Is that right?
Speaker 3: Yes, that's right. We've got a joint venture with Tokyo
Speaker 3: Gas in Japan. Their market got liberalized a few years back,
Speaker 3: and so we've got entrant retailer that we're doing with them,
Speaker 3: and then we've got our technology going into the rest
Speaker 3: of the Tokyo Gas business as well.
Speaker 1: So let's look at krack and then, because that is
Speaker 1: what you're famous for, what does it do? You know
Speaker 1: for the lay person? You know what's so amazing about it?
Speaker 3: Look, I think one of the big benefits of Kraken
Speaker 3: is that it's modern, a modern technology stack, and there's
Speaker 3: accessible data and the platform is very user friendly. So
Speaker 3: it's the combination of those things that allow retail businesses
Speaker 3: to operate more efficiently but also develop new products. So,
Speaker 3: you know, we're all familiar with electricity as kind of
Speaker 3: bills ending up in your email or in the post,
Speaker 3: but increasingly there's this opportunity to help consumers shift their
Speaker 3: demand around and drive down the cost of energy for
Speaker 3: those consumers. And in order to be able to offer
Speaker 3: those types of products, you need a level of sophistication
Speaker 3: in terms of your technology stack. You need deep data
Speaker 3: and you need tools that allow you to offer that
Speaker 3: in consumer ways of engaging and ways of managing their
Speaker 3: devices within the home. And that's really what Kraken underpins.
Speaker 1: And if we look at cracking in terms of its competitors,
Speaker 1: the technology I'm talking here, I mean it's the likes
Speaker 1: of gen Track, who also work with energy companies and
Speaker 1: utilities for the smart.
Speaker 3: Tech that's right. Gen Track are called SAP. All of
Speaker 3: these big big names are the competitors for krackin so
Speaker 3: cracking is really a B to B products. So Kraken
Speaker 3: is sold to large utilities around the world. So the
Speaker 3: likes of edf or as you mentioned, Origin Energy in
Speaker 3: Australia er gone in Australia, So that's a product that
Speaker 3: helps them operate their their retail business really smartly. For
Speaker 3: us as an electricity retailer, there's an opportunity to use
Speaker 3: that platform to deliver really innovative products.
Speaker 1: And if you look at the percentages of where the
Speaker 1: focuses for the business I mean, is the B to
Speaker 1: B are much bigger part than says you see, the
Speaker 1: retail is quite small.
Speaker 3: So globally, Kraken is increasingly becoming separate from the Octopus
Speaker 3: Energy operations, and that's really because we're serving so many
Speaker 3: of our competitors through that technology licensing. But they're both
Speaker 3: really significant businesses in their own right. And Octopus Energy
Speaker 3: as a retail supplier supplies over about over eleven and
Speaker 3: a half million consumers around the globe. So we've got
Speaker 3: retail businesses in the UK, in most of Western Europe,
Speaker 3: the Japanese one which you mentioned, the US, and our
Speaker 3: seven thousand very important customers in New Zealand. What about Australia, No,
Speaker 3: we don't have a retail business in Australia.
Speaker 1: What about generation assets because obviously the competition here eighty
Speaker 1: five percent I think are the big four if you like, Contact, Genesis,
Speaker 1: Rominian Mercury, they've got kind of the line's share of
Speaker 1: the market and they are they've got the generation assets
Speaker 1: as well as the retail arm Would I know you've
Speaker 1: gotneration assets in other parts of the world. Would Octopus
Speaker 1: consider that here?
Speaker 3: Look the New Zealand market is in the scope of
Speaker 3: the funds that we have for investing in new generations,
Speaker 3: so it's a possibility. Again, we've signaled to government and
Speaker 3: regulators that the current market settings don't work well for
Speaker 3: independent players, and so you know, we've got lots of
Speaker 3: great opportunities around the globe, but today New Zealand hasn't
Speaker 3: been a priority. As a New Zealander, I would love
Speaker 3: it to be a priority, and I'm forever sending my
Speaker 3: UK colleagues different projects and things that they can invest in.
Speaker 3: But I think i'm you know, one of the things
Speaker 3: I'm hoping that government does is part of this package
Speaker 3: of reforms that they're looking at, is think about how
Speaker 3: they can mobilize all that investment and know how from
Speaker 3: companies overseas to come into the New Zealand market.
Speaker 1: Before we dive into the dynamics of the market and
Speaker 1: what's happening at the moment, perhaps if you can give
Speaker 1: us an idea of what you think the demand is
Speaker 1: for electricity, I mean the likes of data centers and worldwide,
Speaker 1: not just New Zealand. You know, it just seems like
Speaker 1: we need more and more. But what sort of stats
Speaker 1: can you offer for that.
Speaker 3: Yeah, so the global picture is quite interesting. So globally
Speaker 3: we've traditionally growing energy electricity demand by about two and
Speaker 3: a half percent per anim but over the past year
Speaker 3: that's really tipped up, so it's almost double that in
Speaker 3: a year.
Speaker 1: AI.
Speaker 3: It's a combination of a few things, So AI is
Speaker 3: definitely a driver, but also the cost of solar and
Speaker 3: the access to that, particularly in emerging economies, has driven
Speaker 3: rapid electrification in India. And then China is going gangbusters
Speaker 3: on electrifying and you know, is really an electro state
Speaker 3: now and a real pioneer of you know, rapid deployment
Speaker 3: of renewables. And also they manufacture so much of the
Speaker 3: of the products that go across the electricity supply chain
Speaker 3: as well. So the global picture for electricity is growth.
Speaker 3: The New Zealand picture is more complicated. So, you know,
Speaker 3: most listeners will have been aware that over the past
Speaker 3: year we've had significant struggles in terms of security of supply,
Speaker 3: but on top of that, we've had really high prices
Speaker 3: since really about twenty eighteen they kicked up and as
Speaker 3: a result of that, you know, we've had quite flat demand.
Speaker 3: So and even last year it declined because we were
Speaker 3: asking large consumers to curtail their usage, but I think
Speaker 3: we should be more optimistic about the about what future
Speaker 3: the future, and you know that if we can build
Speaker 3: enough generation to service the demand, then you know we
Speaker 3: should be realizing a significant increase in it. So we
Speaker 3: already know that there there's you know, between half a
Speaker 3: gig and a gig depends who you talk to. With
Speaker 3: the data centers sitting there to be built before twenty thirty,
Speaker 3: so that's pretty soon. So when you think if we've
Speaker 3: got that much data center load, then in terms of
Speaker 3: the new renewables to match off, we need you know,
Speaker 3: if it's just a they're all an exact match, but
Speaker 3: if it's wind and solar, then we need about you know,
Speaker 3: four times the capacity of whatever's coming on to be built.
Speaker 3: So there's the opportunity to realize those that growth from
Speaker 3: data centers. We will continue to get some increase from
Speaker 3: the residential space, and that will be driven by the
Speaker 3: rate of house builds. So we see, you know, every
Speaker 3: house that gets built that will edge consumption and the
Speaker 3: rate at which they electrified their transport. So yeah, if
Speaker 3: you buy an EV that will add kind of twenty
Speaker 3: to thirty percent more consumption onto your household. So I
Speaker 3: think if we get the clean car discount back that yeah,
Speaker 3: we saw that that when that discount was in place,
Speaker 3: we did see the rapid more rapid adoption of vbs,
Speaker 3: but that's really Plata's recently and I think also the
Speaker 3: economic climate impacts that. And the other thing is we're
Speaker 3: also saying that many households are quite cost constraints conscious,
Speaker 3: so actual residential consumption on averages is pretty flat, but
Speaker 3: it's that new build that's adding to the system as well.
Speaker 1: So Margaret, on a world scale, then how progressive actually
Speaker 1: is New Zealand when it comes to electrifying and putting
Speaker 1: money into renewable energy generation.
Speaker 3: So if we look at the performance over the last decade,
Speaker 3: you know, New Zealand we've added on a per capita basis,
Speaker 3: so probably max about forty fifty watts per person. In contrast,
Speaker 3: Australia is about four times that. In contrast, again, China
Speaker 3: is probably about ten times that. Almost five hundred watts
Speaker 3: was in the last year alone. So we've been very
Speaker 3: modest in the way that we've scaled our system and
Speaker 3: I think that's our immediate challenge is really getting that
Speaker 3: uptick and new supply the.
Speaker 1: Un residential though, I mean, are we a place in
Speaker 1: the world where if it's data centers all the like,
Speaker 1: where you know, we could be seen as somewhere where
Speaker 1: we could generate electricity and pass it on beyond our
Speaker 1: shores sort of thing. Yeah.
Speaker 3: Look, I think the other thing I should have mentioned
Speaker 3: is obviously we've got this need to electrify industry that's
Speaker 3: currently using gas, and that's a really immediate need. So
Speaker 3: if you think about many of those large gas users
Speaker 3: like Fonterra or others, they've got a massive shift that
Speaker 3: they need to do very quickly in terms of New
Speaker 3: Zealand being an appealing place to come and set up. Look,
Speaker 3: I think the Minister of Finance has talked about, you know,
Speaker 3: one of the most common complaints she has is the
Speaker 3: price of it in New Zealand and that that has
Speaker 3: been prohibitive in recent years. But when we look at
Speaker 3: the cost of building new electricity generation, actually we should
Speaker 3: have some confidence that we should go after these opportunities
Speaker 3: and really our challenges getting ourselves into a position that
Speaker 3: we're building ahead of the ahead of the demand, so
Speaker 3: that we don't have the crazy prices that we have had.
Speaker 1: Okay, let's look at the sector at the moment. We've
Speaker 1: got two reviews, a sort of parallel if you like.
Speaker 1: I think one of them is worth the Minister for
Speaker 1: Energy that was done by Frontier Economics, and that was
Speaker 1: focusing on the whole sector really in many things. And
Speaker 1: then obviously the Electricity Authority and the Commerce Commission have
Speaker 1: been looking probably more at competition and whether or not
Speaker 1: the big four, the four Gen tailors really have a
Speaker 1: sort of a dominance that they make it a bit
Speaker 1: un fear. Are you hopeful that there will be some
Speaker 1: change with I mean, we've had reviews before and many
Speaker 1: of them.
Speaker 3: Look, we're starting to see some change come through from
Speaker 3: the regulator. So we had some announcements last week about changes,
Speaker 3: which we think, you know, they're just announcements of consultation
Speaker 3: at the moment, so I'm lied to kind of put
Speaker 3: too much stock in them until we've seen the detail. Yes,
Speaker 3: but they signal. The signal is really positive. You know,
Speaker 3: we've had real problems with the contracts market that actually
Speaker 3: underpins the trading between the big gen tailors and between
Speaker 3: independent players and large industrial consumers. That has not worked
Speaker 3: well and that's probably not a surprise when we've got
Speaker 3: so much vertical integration and such moments in the sector.
Speaker 3: But you know, it has been frustrating that these these
Speaker 3: are kind of well flagged issues, they're not new, but
Speaker 3: the regulatory response has been too slow. But you know,
Speaker 3: the electricity authorities moving at pace now and I think
Speaker 3: our job is to work with them to try and
Speaker 3: make those rules as effective as possible. The frontier review,
Speaker 3: we're all yes, yet to know what's in there. We've
Speaker 3: you know, heard different snippets about, you know, this idea
Speaker 3: of thermal co or nationalizing some of the thermal assets.
Speaker 3: I think, though, you know, the priority needs to be
Speaker 3: on how can we get out of this current build
Speaker 3: after the demanding you know, we need to break that cycle.
Speaker 3: But also I think I think generally the sector has
Speaker 3: been resting too much on its laurels and been quite
Speaker 3: complacent about a deteriorating situation. So there will no doubt
Speaker 3: be some well, I think there needs to be some
Speaker 3: changes in there around the governance of this of the
Speaker 3: industry and the monitoring of security of supply, because very
Speaker 3: scarily in a dry yet last year we got down
Speaker 3: to days of coal stock file left and for such
Speaker 3: a critical industry, you know, we can't. We can't run
Speaker 3: it like this. We need to be making sure that
Speaker 3: we have that downside risk covered because that's what ultimately
Speaker 3: costs New Zealand businesses so much, either in the price
Speaker 3: that that that risk translates to in terms of higher
Speaker 3: prices in the market or having to down their production,
Speaker 3: which you know, it's bad if we don't. If we
Speaker 3: can't make stuff and ship stuff, we can't earn money
Speaker 3: to build the hospitals and roads and things that we
Speaker 3: need in New Zealand. What do you think of.
Speaker 1: The four gen tailors have got together and sort of
Speaker 1: a backup, if you like, with coal through Genesis and
Speaker 1: they're thinking about they would have an agreement whereby there
Speaker 1: would be a backup using coal and it's got to
Speaker 1: have Commerce Commission approval and the like, but would supposedly
Speaker 1: open the door for retailers like yourselves to have access
Speaker 1: to something like that too.
Speaker 3: Keeping the generation in market is really important because we
Speaker 3: absolutely need it, you mean coal that well. Keeping that
Speaker 3: hunting plant plan in market is really critical because we're
Speaker 3: losing all the gas generation that we have had, so
Speaker 3: we just can't afford to lose it. It's obviously not
Speaker 3: ideal that it's coal, but you know, we've got to
Speaker 3: be pragmatic about these things. I think our preference would
Speaker 3: be for an arrangement that was more accessible for people,
Speaker 3: but I think we'll wait to see what the details
Speaker 3: of that are because there's limited transparency over those around
Speaker 3: those arrangements at the moment, so it's actually quite hard
Speaker 3: to comment on whether they're good or bad. But I
Speaker 3: think there is a comment to be made around the
Speaker 3: suggestions that contracting will happen off the back of it.
Speaker 3: What we've seen previously is actually there's been ongoing issues
Speaker 3: around that contracting and continuous refusals to supply. So I
Speaker 3: think as part of the Commerce Commissions approval of that,
Speaker 3: assuming that happens, that they should be putting a conditions
Speaker 3: on it, that there's a commitment around the volume of
Speaker 3: trading that happens off the back of these arrangements, because
Speaker 3: I think, you know, otherwise it's a hollow promise that
Speaker 3: based on previous behavior hasn't borne out.
Speaker 1: So do you mean that like at the moment, as
Speaker 1: a generation retailer, you can it would appear. I don't
Speaker 1: know if this is actually how it happens, but they
Speaker 1: would be able to sort of favor their own retail arm.
Speaker 3: That plus, as some of the work from the electricity
Speaker 3: authority has picked up, there's been an ongoing issue of
Speaker 3: just refusal to supply, so refusal to engage in contracting,
Speaker 3: and very very low volumes of trading. So those are
Speaker 3: some of the problems that make it really unsustainable for
Speaker 3: independent generators and retailers to come into the market because
Speaker 3: you need a level of liquidity in the market to
Speaker 3: to make things work effectively to met Just still.
Speaker 1: On the independent retailer generator or retailer question, I mean
Speaker 1: a lot of commentators, particularly Obseas, talk about New Zealand
Speaker 1: having about fifty Is that actually right? I mean, is
Speaker 1: that the amount of choice that consumers.
Speaker 3: Really do have? No, it's not. It's I mean, there's
Speaker 3: fifty registered on the yahah, but like some of them
Speaker 3: are random people or you know, it might be a
Speaker 3: local airport that's just covering the shops in that airport.
Speaker 3: So I think there's the if you look at the
Speaker 3: level of available offers to consumers, that's actually declined significantly
Speaker 3: over recent years. So we've had we've you know, we've
Speaker 3: got about eighty seven percent of the retail market concentrated
Speaker 3: in the Big four. We've had Flick going to Meridian Edge.
Speaker 3: We've had Energy Club got sucked up a few years ago,
Speaker 3: We've had Ecotricity acquired by Genesis. There's there's increasing contraction
Speaker 3: concentration and less options available for consumers as a result.
Speaker 3: And I think you that that bears out in the
Speaker 3: data around the offers available to consumers and how innovative
Speaker 3: they are or not. And also, you know, we have
Speaker 3: seen that when when independent retailers come out of market,
Speaker 3: like last year when Electric Key we stopped accepting customers immediately,
Speaker 3: there was actually quite a significant increase in the prices
Speaker 3: from the Big four that were on power Switch. So
Speaker 3: I think there's a really important dynamic that that independent
Speaker 3: competition introduces that is around price, but it's also around
Speaker 3: the innovation that delivers lower cost for consumers. So that
Speaker 3: would be things like if you look at the independence
Speaker 3: the pioneering things like hour of power, the use of
Speaker 3: hot water control, time of use, tariffs, each of these
Speaker 3: can actually deliver material savings to the end consumer. And
Speaker 3: we want to we want that dynamic to continue because
Speaker 3: one of the biggest opportunities we have in driving down
Speaker 3: the cost of energy for end consumers is actually engaging
Speaker 3: that demand side more smartly, so that ability to if
Speaker 3: you think about your energy usage, there's probably about sixty
Speaker 3: percent of it that can be shifted to any time
Speaker 3: of day without it interrupting your lifestyle, and that at
Speaker 3: the moment that doesn't happen, and it's how do we
Speaker 3: make that happen, Because if we could shift that into
Speaker 3: the times when we've got like an abundance of wind
Speaker 3: and prices are lower, it allows us both to reduce
Speaker 3: the cost of your bill is a household, but also
Speaker 3: it will help us accelerate the rate at which we
Speaker 3: bring renewables into the energy system. And equally, you know,
Speaker 3: a lot of the cost for consumers will be driven
Speaker 3: from how much lines capacity we need to build. And
Speaker 3: if we can do things like avoid charging our vehicles
Speaker 3: at peak, this will stop us having to invest significantly
Speaker 3: in really expensive poles and wires and transformers and things.
Speaker 3: It will mean that we can use the existing infrastructure
Speaker 3: much more smartly. So that's part of the role of
Speaker 3: retailers is to bring more dynamicism in the way that
Speaker 3: doesn't put the burden on consumers in terms of mental overhead,
Speaker 3: but just makes it easier for them.
Speaker 1: Is that not happening now? Then surely there is innovation
Speaker 1: going on. Given the competition even between the four dentators
Speaker 1: for example.
Speaker 3: It's been limited. So as a result, we've seen that
Speaker 3: the electricity authorities actually regulated the large four to require
Speaker 3: them to offer time abuse tariffs. And you know they're
Speaker 3: not all the same, so some of them were quick
Speaker 3: to embrace things like hot water others that's taken them
Speaker 3: four years to enable that for consumers, and speaking as
Speaker 3: a retailer, that's not a hard thing to enable.
Speaker 1: Just thinking too, then of investors here, given that that's
Speaker 1: our audience and the situation at the moment, I mean,
Speaker 1: there's a lot of enthusiasm about investing in energy. As
Speaker 1: you said it, you know, it's kind of the corners
Speaker 1: own of our lives and the economy to some degree.
Speaker 1: What would you say to retail investors when they're faced
Speaker 1: with the situation we have now there's a lot of
Speaker 1: change probably about to happen, or who knows really what
Speaker 1: what that will end up being. But if they're looking
Speaker 1: our investors particularly, I really can on innovation and tech
Speaker 1: and you know, what would you say to them about
Speaker 1: thinking about where they put their money in terms of
Speaker 1: the sectors. I mean it's apart from some of the
Speaker 1: listed entities, is probably not that many avenues for them.
Speaker 3: Well, it's interesting because the way our electricity system works
Speaker 3: ultimately impacts so many of the companies that your investors
Speaker 3: will be investing in. So whether it's you know, the
Speaker 3: refrigeration at Mainfrage, or the production costs for milk powder,
Speaker 3: the age two cells, or you know, the list goes on,
Speaker 3: is such a fundamental ingredient. I think you know, as
Speaker 3: as investors, you have influence over these boards. So it's
Speaker 3: making sure that we're doing the right thing in terms
Speaker 3: of the New Zealand economy and building out the electricity sector.
Speaker 3: I think, you know, the fundamentals mean that it's a
Speaker 3: sector that will continue to grow ultimately, and you know,
Speaker 3: we should have confidence that would all be better off
Speaker 3: by having a larger electricity market and system and more
Speaker 3: diversity within that market. What about the.
Speaker 1: Risks there's always risks with investment, I mean, particularly in
Speaker 1: the energy sector.
Speaker 3: I think the risks in the electricity sector at the
Speaker 3: moment the biggest risk we have is continued de industrialization.
Speaker 3: That's not good for anyone, and that's the current trajectory
Speaker 3: we're on. So I look at the opportunity for change,
Speaker 3: as you know, fundamentally it should add to the possibilities
Speaker 3: for growth in the sector if we get the settings right.
Speaker 1: What would be getting the settings right for Octopus to
Speaker 1: thrive and be a larger player, if you like, almost
Speaker 1: significant player in New Zealand.
Speaker 3: Yeah. So in terms of what I think the New
Speaker 3: Zealand needs to focus on, it's one we need a strategy,
Speaker 3: you know, we should unlike many countries in the world,
Speaker 3: the economics of electrication should work for end consumers. So
Speaker 3: we don't have cheap fossil fuel here. We import huge
Speaker 3: amounts of fuel and the more quickly we can displace that,
Speaker 3: the more money we have in our wallets, and the
Speaker 3: more competitive we should be. So we should be really
Speaker 3: focused on making that change happen quickly. I think what
Speaker 3: we've seen over the past, well over this decade, is
Speaker 3: that you know, investors in large infrastructure and naturally conservative
Speaker 3: because they've got large assets, you know, and that is legitimate.
Speaker 3: How do we motivate them and incentivize them to invest
Speaker 3: ahead of demand, and we've seen other countries have put
Speaker 3: in place mechanisms to encourage that demand to come, that
Speaker 3: supply to come ahead of demand. So I think long
Speaker 3: term contracting arrangements, all of these types of things should
Speaker 3: be considered for New Zealand. I think then there's a
Speaker 3: question around how that market is working, and I think
Speaker 3: some of what the Electricity Authority is working on at
Speaker 3: the moment should hopefully address that. And then we do
Speaker 3: need just better governance of the sector and coordination, especially
Speaker 3: at the moment because we've got a really complicated situation
Speaker 3: of fast declining gas and need to help those industries
Speaker 3: exposed switch quickly into electricity, and the need to immediately
Speaker 3: scale electricity. So I think, you know, there's only so
Speaker 3: much different actors in the market can do to resolve that,
Speaker 3: but it actually requires a bit of facilitation from government.
Speaker 3: You know, if we were head confidence about the market
Speaker 3: settings and the ability to grow with be more of
Speaker 3: a mass market player. And we've got some great products
Speaker 3: that we no have appeal with the general customer. We've
Speaker 3: seen the success of them in other markets and are
Speaker 3: excited about the potential to offer better choice to New
Speaker 3: Zealand consumers.
Speaker 1: What's an example of one of those innovative products.
Speaker 3: Yeah, so we've got we've got one of these news
Speaker 3: land as well, so a zero bell home. So we
Speaker 3: are working with property developers in the UK. Basically the
Speaker 3: cheapest time to put much of this technology into homes
Speaker 3: is when they're getting built. But you get this incentive issue,
Speaker 3: like if a property developers building homes, they're really cost conscious,
Speaker 3: and how do we incentivize those builders to build homes
Speaker 3: that are more energy smart? And so what we've done
Speaker 3: is we've provided a five year guarantee that if a
Speaker 3: new home is built and it meets a bunch of
Speaker 3: criteria so it's got solar and battery and heat pumps,
Speaker 3: that we can give a guarantee that we would there
Speaker 3: will be no bill for that house for five years.
Speaker 3: Obviously assumes normal consumption, but no bitcoin miners in these properties.
Speaker 3: But you know, that is a really compelling proposition and
Speaker 3: it's a fantastic one for social housing developers and things.
Speaker 3: So we've been doing lots of these in the UK.
Speaker 3: We're working with a bunch of property developers here around
Speaker 3: the concept. It always takes quite long, yeah, you know,
Speaker 3: go from concept of building properties. But that's an example
Speaker 3: where we think, you know, a simple solution that delivers
Speaker 3: great outcomes for the consumer. Another one is where we
Speaker 3: have a product called Intelligent Octopus. We have actually about
Speaker 3: ten percent of the UK's EV fleet and managed using
Speaker 3: this product, and basically it helps if you on your
Speaker 3: app use sele I need my car by X time
Speaker 3: in the morning, and then we will determine when that
Speaker 3: car is charged based on what's happening in the market
Speaker 3: and deliver you a much lower price and return for
Speaker 3: having control over charging it. And really excitingly, we're starting
Speaker 3: to see vehicle to grid capable cars come into the
Speaker 3: market at quite accessible price point. So then you imagine
Speaker 3: that functionality with the ability to export into the grid,
Speaker 3: the energy market starts looking quite different. It would only
Speaker 3: take tens of thousands of these vehicles to totally nail
Speaker 3: the peak problem that we have. So I think there's
Speaker 3: these really exciting opportunities to use technology more smartly and
Speaker 3: that will hopefully lower the cost of supply for all
Speaker 3: of us.
Speaker 1: Well, great chat, Margaret. We could go for hours, but
Speaker 1: we'll leave it there. Thank you for coming in. Thanks
Speaker 1: so much for having me. Really enjoyed talking to you
Speaker 1: and thanks everyone for tuning in. You can watch shed
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Speaker 1: like to hear next. Matowa mm hmm