WEBVTT - Can independent innovators fix our power sector? 0:00:04.760 --> 0:00:07.920 Cura and welcome to Shed Lunch, brought to you by Cheesy's. 0:00:08.080 --> 0:00:11.600 I'm Helen Mattison. Today we look at the perspective of 0:00:11.680 --> 0:00:16.560 the UK's fastest growing energy supplier, Octopus Energy. We ask 0:00:16.840 --> 0:00:19.280 what in roads has Octopus made since it's been here 0:00:19.280 --> 0:00:23.240 in New Zealand, does the electricity sector allow for fresh 0:00:23.239 --> 0:00:27.320 competition and how much will technical innovation helps solve our 0:00:27.400 --> 0:00:31.120 power problems. In a moment, I'll be joined by Octopus 0:00:31.240 --> 0:00:36.040 Energies Chief operating Officer, Margaret Cooney. But before we get started, 0:00:36.440 --> 0:00:37.760 here's some important information. 0:00:38.640 --> 0:00:41.239 Investing involves the risk you might lose the money you 0:00:41.280 --> 0:00:44.559 start with. We recommend talking to a licensed financial advisor. 0:00:45.280 --> 0:00:49.120 We also recommend reading product disclosure documents before deciding to invest. 0:00:49.400 --> 0:00:51.760 Everything you're about to see and here is current at 0:00:51.800 --> 0:00:52.599 the time of recording. 0:00:52.720 --> 0:00:54.960 Welcome Margaret, love you to have you in the studio. 0:00:55.360 --> 0:00:56.200 Thanks for having me. 0:00:57.200 --> 0:01:00.480 Now, before we dive into who Octopus it and what 0:01:00.520 --> 0:01:03.120 you're doing here in New Zealand, let's look at your 0:01:03.160 --> 0:01:06.000 background from what I can gather. For about twenty years 0:01:06.000 --> 0:01:09.000 now or probably more, you've been in the energy sector 0:01:09.040 --> 0:01:12.280 and various guys. As I think you started off as 0:01:12.319 --> 0:01:15.959 an analyst in the market and regulatory scene. You've worked 0:01:16.000 --> 0:01:20.520 for Meridian, Powershop Electric, I think you consulted for in 0:01:20.560 --> 0:01:22.600 the like and obviously a big stunt in the UK. 0:01:23.480 --> 0:01:26.720 What is it that fascinates you about the electricity sector 0:01:26.800 --> 0:01:27.880 or the energy sector. 0:01:29.360 --> 0:01:32.720 Look, I think that electricity sector is really interesting and 0:01:32.800 --> 0:01:37.440 obviously underpins our economy, so I think that's you know, 0:01:37.640 --> 0:01:41.280 that's important to me that it's a really well functioning sector. 0:01:41.400 --> 0:01:46.160 But also we're in this phase of significant change, so 0:01:46.840 --> 0:01:51.560 the economics of energy are changing significantly. The need to 0:01:51.600 --> 0:01:56.120 decarbonize our economy is really important, and I think it's 0:01:56.160 --> 0:02:00.400 a fantastic growth opportunity. So it's a really interesting sector 0:02:00.520 --> 0:02:04.440 to be a part of, and I feel really fortunate 0:02:04.480 --> 0:02:07.880 that I've had some amazing opportunities in the sector. So, 0:02:08.480 --> 0:02:10.840 you know, early on in my career I was involved 0:02:10.840 --> 0:02:14.559 in setting up power Shop, which was a very innovative 0:02:15.520 --> 0:02:21.160 company and really bought the benefits of smart meters that 0:02:21.200 --> 0:02:24.760 have just been put into many New Zealand homes, brought 0:02:24.760 --> 0:02:28.040 those benefits through to consumers for the first time. But 0:02:28.160 --> 0:02:33.240 I think that early experience of doing things differently, of 0:02:33.320 --> 0:02:37.520 driving change, you know, that's something I've tried to continue 0:02:37.560 --> 0:02:41.320 in my career as well. So that leads us to Octopus. 0:02:41.720 --> 0:02:44.079 So give us an idea of how long you've been 0:02:44.120 --> 0:02:46.480 here and really what's your point of difference. 0:02:47.040 --> 0:02:49.680 Yeah, so Octopus has been in the New Zealand market 0:02:49.760 --> 0:02:55.079 since twenty twenty. We initially set up here to service 0:02:55.320 --> 0:02:59.440 a bunch of technology projects in the APEC region. So 0:02:59.480 --> 0:03:01.560 we've actually we've got a team of about one hundred 0:03:01.560 --> 0:03:06.160 and fifty in New Zealand and the vast majority of 0:03:06.160 --> 0:03:08.480 them don't work on anything to do with New Zealand. 0:03:08.560 --> 0:03:14.560 They're actually providing support to our operations globally. Or there's 0:03:14.600 --> 0:03:20.080 a team KRACKN that's increasingly separate from Octopus now who 0:03:20.280 --> 0:03:26.400 are helping transform energy businesses in the APAC region. Some 0:03:26.480 --> 0:03:29.320 of them are working on the Meridian project close to home. 0:03:30.120 --> 0:03:32.840 So yeah, we have a few things going on. We 0:03:32.960 --> 0:03:37.800 have a small retail business as well of seven thousand customers. 0:03:38.800 --> 0:03:41.080 We would love to grow that, but we've been very 0:03:41.120 --> 0:03:44.040 clear that the current market settings don't work for us 0:03:44.840 --> 0:03:49.240 to grow that. So it's been experimental, I guess today. 0:03:50.040 --> 0:03:52.560 So we look at the backers of the company to 0:03:52.920 --> 0:03:55.840 it's a private company. The parent being obviously in the UK, 0:03:56.160 --> 0:03:58.800 you've got some big backers like Origin Energy, which is 0:03:58.800 --> 0:04:02.680 out of Australia. There did You've got Tokyo Gas, who 0:04:02.720 --> 0:04:07.400 I think you're working with to deploy octopercentergy in Japan? 0:04:07.520 --> 0:04:07.960 Is that right? 0:04:08.160 --> 0:04:10.440 Yes, that's right. We've got a joint venture with Tokyo 0:04:10.560 --> 0:04:16.080 Gas in Japan. Their market got liberalized a few years back, 0:04:16.120 --> 0:04:22.680 and so we've got entrant retailer that we're doing with them, 0:04:22.839 --> 0:04:25.840 and then we've got our technology going into the rest 0:04:25.920 --> 0:04:28.000 of the Tokyo Gas business as well. 0:04:28.560 --> 0:04:30.479 So let's look at krack and then, because that is 0:04:30.520 --> 0:04:34.479 what you're famous for, what does it do? You know 0:04:34.520 --> 0:04:37.360 for the lay person? You know what's so amazing about it? 0:04:37.839 --> 0:04:41.400 Look, I think one of the big benefits of Kraken 0:04:41.720 --> 0:04:46.520 is that it's modern, a modern technology stack, and there's 0:04:47.720 --> 0:04:52.000 accessible data and the platform is very user friendly. So 0:04:52.080 --> 0:04:56.360 it's the combination of those things that allow retail businesses 0:04:56.440 --> 0:05:01.200 to operate more efficiently but also develop new products. So, 0:05:02.240 --> 0:05:05.320 you know, we're all familiar with electricity as kind of 0:05:05.360 --> 0:05:08.040 bills ending up in your email or in the post, 0:05:08.640 --> 0:05:13.760 but increasingly there's this opportunity to help consumers shift their 0:05:13.760 --> 0:05:17.839 demand around and drive down the cost of energy for 0:05:17.880 --> 0:05:22.200 those consumers. And in order to be able to offer 0:05:22.240 --> 0:05:26.440 those types of products, you need a level of sophistication 0:05:26.560 --> 0:05:29.760 in terms of your technology stack. You need deep data 0:05:30.440 --> 0:05:34.280 and you need tools that allow you to offer that 0:05:34.720 --> 0:05:39.719 in consumer ways of engaging and ways of managing their 0:05:40.279 --> 0:05:44.480 devices within the home. And that's really what Kraken underpins. 0:05:44.880 --> 0:05:48.560 And if we look at cracking in terms of its competitors, 0:05:48.600 --> 0:05:51.440 the technology I'm talking here, I mean it's the likes 0:05:51.440 --> 0:05:54.680 of gen Track, who also work with energy companies and 0:05:54.760 --> 0:05:57.560 utilities for the smart. 0:05:57.279 --> 0:06:02.120 Tech that's right. Gen Track are called SAP. All of 0:06:02.160 --> 0:06:07.560 these big big names are the competitors for krackin so 0:06:07.760 --> 0:06:11.760 cracking is really a B to B products. So Kraken 0:06:11.880 --> 0:06:16.880 is sold to large utilities around the world. So the 0:06:17.120 --> 0:06:21.839 likes of edf or as you mentioned, Origin Energy in 0:06:21.839 --> 0:06:26.760 Australia er gone in Australia, So that's a product that 0:06:26.920 --> 0:06:31.920 helps them operate their their retail business really smartly. For 0:06:32.040 --> 0:06:37.120 us as an electricity retailer, there's an opportunity to use 0:06:37.160 --> 0:06:40.400 that platform to deliver really innovative products. 0:06:40.480 --> 0:06:43.240 And if you look at the percentages of where the 0:06:43.279 --> 0:06:45.320 focuses for the business I mean, is the B to 0:06:45.400 --> 0:06:47.479 B are much bigger part than says you see, the 0:06:47.520 --> 0:06:49.080 retail is quite small. 0:06:49.240 --> 0:06:56.279 So globally, Kraken is increasingly becoming separate from the Octopus 0:06:56.400 --> 0:07:01.360 Energy operations, and that's really because we're serving so many 0:07:01.360 --> 0:07:06.400 of our competitors through that technology licensing. But they're both 0:07:06.440 --> 0:07:12.720 really significant businesses in their own right. And Octopus Energy 0:07:13.200 --> 0:07:17.880 as a retail supplier supplies over about over eleven and 0:07:17.960 --> 0:07:21.480 a half million consumers around the globe. So we've got 0:07:21.600 --> 0:07:25.440 retail businesses in the UK, in most of Western Europe, 0:07:26.440 --> 0:07:31.280 the Japanese one which you mentioned, the US, and our 0:07:31.480 --> 0:07:36.480 seven thousand very important customers in New Zealand. What about Australia, No, 0:07:37.040 --> 0:07:39.640 we don't have a retail business in Australia. 0:07:39.680 --> 0:07:44.520 What about generation assets because obviously the competition here eighty 0:07:44.520 --> 0:07:48.920 five percent I think are the big four if you like, Contact, Genesis, 0:07:49.200 --> 0:07:52.320 Rominian Mercury, they've got kind of the line's share of 0:07:52.360 --> 0:07:56.160 the market and they are they've got the generation assets 0:07:56.240 --> 0:07:59.680 as well as the retail arm Would I know you've 0:07:59.680 --> 0:08:02.480 gotneration assets in other parts of the world. Would Octopus 0:08:02.520 --> 0:08:03.600 consider that here? 0:08:04.440 --> 0:08:08.040 Look the New Zealand market is in the scope of 0:08:08.080 --> 0:08:11.760 the funds that we have for investing in new generations, 0:08:11.760 --> 0:08:16.800 so it's a possibility. Again, we've signaled to government and 0:08:16.840 --> 0:08:20.320 regulators that the current market settings don't work well for 0:08:20.560 --> 0:08:24.200 independent players, and so you know, we've got lots of 0:08:24.200 --> 0:08:28.040 great opportunities around the globe, but today New Zealand hasn't 0:08:28.080 --> 0:08:31.080 been a priority. As a New Zealander, I would love 0:08:31.120 --> 0:08:33.760 it to be a priority, and I'm forever sending my 0:08:34.440 --> 0:08:39.240 UK colleagues different projects and things that they can invest in. 0:08:39.480 --> 0:08:43.439 But I think i'm you know, one of the things 0:08:43.480 --> 0:08:46.640 I'm hoping that government does is part of this package 0:08:46.640 --> 0:08:49.880 of reforms that they're looking at, is think about how 0:08:49.880 --> 0:08:54.440 they can mobilize all that investment and know how from 0:08:54.520 --> 0:08:57.280 companies overseas to come into the New Zealand market. 0:08:57.640 --> 0:09:00.560 Before we dive into the dynamics of the market and 0:09:00.600 --> 0:09:03.400 what's happening at the moment, perhaps if you can give 0:09:03.440 --> 0:09:05.840 us an idea of what you think the demand is 0:09:05.880 --> 0:09:09.679 for electricity, I mean the likes of data centers and worldwide, 0:09:09.679 --> 0:09:11.680 not just New Zealand. You know, it just seems like 0:09:11.720 --> 0:09:15.200 we need more and more. But what sort of stats 0:09:15.240 --> 0:09:16.400 can you offer for that. 0:09:16.960 --> 0:09:20.199 Yeah, so the global picture is quite interesting. So globally 0:09:20.640 --> 0:09:26.320 we've traditionally growing energy electricity demand by about two and 0:09:26.320 --> 0:09:30.280 a half percent per anim but over the past year 0:09:30.320 --> 0:09:34.480 that's really tipped up, so it's almost double that in 0:09:34.520 --> 0:09:34.880 a year. 0:09:35.880 --> 0:09:36.160 AI. 0:09:36.679 --> 0:09:40.040 It's a combination of a few things, So AI is 0:09:40.080 --> 0:09:44.439 definitely a driver, but also the cost of solar and 0:09:46.440 --> 0:09:51.800 the access to that, particularly in emerging economies, has driven 0:09:52.640 --> 0:09:57.800 rapid electrification in India. And then China is going gangbusters 0:09:57.840 --> 0:10:02.959 on electrifying and you know, is really an electro state 0:10:03.200 --> 0:10:08.440 now and a real pioneer of you know, rapid deployment 0:10:08.480 --> 0:10:12.400 of renewables. And also they manufacture so much of the 0:10:13.960 --> 0:10:18.400 of the products that go across the electricity supply chain 0:10:18.520 --> 0:10:24.319 as well. So the global picture for electricity is growth. 0:10:25.440 --> 0:10:30.000 The New Zealand picture is more complicated. So, you know, 0:10:31.600 --> 0:10:35.280 most listeners will have been aware that over the past 0:10:35.360 --> 0:10:39.880 year we've had significant struggles in terms of security of supply, 0:10:40.800 --> 0:10:44.840 but on top of that, we've had really high prices 0:10:44.880 --> 0:10:50.640 since really about twenty eighteen they kicked up and as 0:10:50.679 --> 0:10:54.200 a result of that, you know, we've had quite flat demand. 0:10:55.640 --> 0:10:58.880 So and even last year it declined because we were 0:10:58.960 --> 0:11:05.960 asking large consumers to curtail their usage, but I think 0:11:06.000 --> 0:11:10.040 we should be more optimistic about the about what future 0:11:10.200 --> 0:11:14.680 the future, and you know that if we can build 0:11:14.800 --> 0:11:19.760 enough generation to service the demand, then you know we 0:11:19.800 --> 0:11:24.200 should be realizing a significant increase in it. So we 0:11:24.320 --> 0:11:30.400 already know that there there's you know, between half a 0:11:30.440 --> 0:11:33.000 gig and a gig depends who you talk to. With 0:11:33.160 --> 0:11:38.120 the data centers sitting there to be built before twenty thirty, 0:11:38.240 --> 0:11:42.719 so that's pretty soon. So when you think if we've 0:11:42.760 --> 0:11:47.080 got that much data center load, then in terms of 0:11:47.120 --> 0:11:51.760 the new renewables to match off, we need you know, 0:11:51.800 --> 0:11:54.280 if it's just a they're all an exact match, but 0:11:54.320 --> 0:11:57.480 if it's wind and solar, then we need about you know, 0:11:57.720 --> 0:12:03.200 four times the capacity of whatever's coming on to be built. 0:12:03.240 --> 0:12:08.800 So there's the opportunity to realize those that growth from 0:12:08.880 --> 0:12:13.400 data centers. We will continue to get some increase from 0:12:14.760 --> 0:12:18.160 the residential space, and that will be driven by the 0:12:18.280 --> 0:12:22.280 rate of house builds. So we see, you know, every 0:12:22.400 --> 0:12:26.520 house that gets built that will edge consumption and the 0:12:26.640 --> 0:12:31.760 rate at which they electrified their transport. So yeah, if 0:12:31.800 --> 0:12:34.679 you buy an EV that will add kind of twenty 0:12:34.720 --> 0:12:41.960 to thirty percent more consumption onto your household. So I 0:12:42.000 --> 0:12:48.000 think if we get the clean car discount back that yeah, 0:12:48.480 --> 0:12:52.280 we saw that that when that discount was in place, 0:12:52.320 --> 0:12:56.480 we did see the rapid more rapid adoption of vbs, 0:12:56.520 --> 0:12:59.880 but that's really Plata's recently and I think also the 0:13:00.040 --> 0:13:05.000 economic climate impacts that. And the other thing is we're 0:13:05.040 --> 0:13:10.240 also saying that many households are quite cost constraints conscious, 0:13:10.280 --> 0:13:16.760 so actual residential consumption on averages is pretty flat, but 0:13:16.880 --> 0:13:21.080 it's that new build that's adding to the system as well. 0:13:21.440 --> 0:13:25.160 So Margaret, on a world scale, then how progressive actually 0:13:25.280 --> 0:13:29.360 is New Zealand when it comes to electrifying and putting 0:13:29.440 --> 0:13:31.400 money into renewable energy generation. 0:13:32.440 --> 0:13:36.679 So if we look at the performance over the last decade, 0:13:37.080 --> 0:13:41.280 you know, New Zealand we've added on a per capita basis, 0:13:41.320 --> 0:13:49.280 so probably max about forty fifty watts per person. In contrast, 0:13:49.400 --> 0:13:54.800 Australia is about four times that. In contrast, again, China 0:13:54.880 --> 0:13:59.400 is probably about ten times that. Almost five hundred watts 0:13:59.640 --> 0:14:04.400 was in the last year alone. So we've been very 0:14:04.440 --> 0:14:07.800 modest in the way that we've scaled our system and 0:14:07.840 --> 0:14:11.199 I think that's our immediate challenge is really getting that 0:14:11.480 --> 0:14:13.880 uptick and new supply the. 0:14:14.040 --> 0:14:17.080 Un residential though, I mean, are we a place in 0:14:17.120 --> 0:14:19.960 the world where if it's data centers all the like, 0:14:20.040 --> 0:14:22.240 where you know, we could be seen as somewhere where 0:14:22.240 --> 0:14:27.040 we could generate electricity and pass it on beyond our 0:14:27.080 --> 0:14:29.360 shores sort of thing. Yeah. 0:14:29.440 --> 0:14:31.640 Look, I think the other thing I should have mentioned 0:14:31.720 --> 0:14:35.480 is obviously we've got this need to electrify industry that's 0:14:35.560 --> 0:14:38.880 currently using gas, and that's a really immediate need. So 0:14:38.960 --> 0:14:41.600 if you think about many of those large gas users 0:14:41.640 --> 0:14:45.000 like Fonterra or others, they've got a massive shift that 0:14:45.040 --> 0:14:47.800 they need to do very quickly in terms of New 0:14:47.880 --> 0:14:53.240 Zealand being an appealing place to come and set up. Look, 0:14:53.280 --> 0:14:56.800 I think the Minister of Finance has talked about, you know, 0:14:57.280 --> 0:14:59.440 one of the most common complaints she has is the 0:14:59.440 --> 0:15:02.120 price of it in New Zealand and that that has 0:15:02.240 --> 0:15:07.200 been prohibitive in recent years. But when we look at 0:15:07.200 --> 0:15:12.600 the cost of building new electricity generation, actually we should 0:15:12.720 --> 0:15:15.960 have some confidence that we should go after these opportunities 0:15:16.400 --> 0:15:20.760 and really our challenges getting ourselves into a position that 0:15:20.800 --> 0:15:24.720 we're building ahead of the ahead of the demand, so 0:15:24.760 --> 0:15:28.200 that we don't have the crazy prices that we have had. 0:15:28.560 --> 0:15:32.280 Okay, let's look at the sector at the moment. We've 0:15:32.320 --> 0:15:35.960 got two reviews, a sort of parallel if you like. 0:15:36.640 --> 0:15:39.080 I think one of them is worth the Minister for 0:15:39.240 --> 0:15:43.120 Energy that was done by Frontier Economics, and that was 0:15:43.160 --> 0:15:46.760 focusing on the whole sector really in many things. And 0:15:46.800 --> 0:15:50.920 then obviously the Electricity Authority and the Commerce Commission have 0:15:51.040 --> 0:15:54.000 been looking probably more at competition and whether or not 0:15:54.520 --> 0:15:57.480 the big four, the four Gen tailors really have a 0:15:57.560 --> 0:15:59.800 sort of a dominance that they make it a bit 0:15:59.840 --> 0:16:03.480 un fear. Are you hopeful that there will be some 0:16:03.640 --> 0:16:07.440 change with I mean, we've had reviews before and many 0:16:07.480 --> 0:16:09.320 of them. 0:16:09.600 --> 0:16:12.920 Look, we're starting to see some change come through from 0:16:12.960 --> 0:16:18.840 the regulator. So we had some announcements last week about changes, 0:16:18.880 --> 0:16:23.200 which we think, you know, they're just announcements of consultation 0:16:23.320 --> 0:16:26.200 at the moment, so I'm lied to kind of put 0:16:26.240 --> 0:16:30.720 too much stock in them until we've seen the detail. Yes, 0:16:31.400 --> 0:16:34.920 but they signal. The signal is really positive. You know, 0:16:34.960 --> 0:16:40.960 we've had real problems with the contracts market that actually 0:16:41.040 --> 0:16:47.640 underpins the trading between the big gen tailors and between 0:16:47.720 --> 0:16:54.600 independent players and large industrial consumers. That has not worked 0:16:54.640 --> 0:16:57.280 well and that's probably not a surprise when we've got 0:16:57.280 --> 0:17:01.400 so much vertical integration and such moments in the sector. 0:17:01.800 --> 0:17:05.400 But you know, it has been frustrating that these these 0:17:05.400 --> 0:17:09.480 are kind of well flagged issues, they're not new, but 0:17:09.520 --> 0:17:14.560 the regulatory response has been too slow. But you know, 0:17:14.920 --> 0:17:19.240 the electricity authorities moving at pace now and I think 0:17:19.280 --> 0:17:21.639 our job is to work with them to try and 0:17:21.680 --> 0:17:28.159 make those rules as effective as possible. The frontier review, 0:17:28.480 --> 0:17:35.080 we're all yes, yet to know what's in there. We've 0:17:35.320 --> 0:17:40.560 you know, heard different snippets about, you know, this idea 0:17:40.600 --> 0:17:43.920 of thermal co or nationalizing some of the thermal assets. 0:17:45.359 --> 0:17:49.080 I think, though, you know, the priority needs to be 0:17:49.240 --> 0:17:53.359 on how can we get out of this current build 0:17:53.520 --> 0:17:59.440 after the demanding you know, we need to break that cycle. 0:18:00.119 --> 0:18:03.800 But also I think I think generally the sector has 0:18:03.920 --> 0:18:10.280 been resting too much on its laurels and been quite 0:18:10.400 --> 0:18:14.560 complacent about a deteriorating situation. So there will no doubt 0:18:14.680 --> 0:18:19.080 be some well, I think there needs to be some 0:18:19.440 --> 0:18:22.720 changes in there around the governance of this of the 0:18:22.920 --> 0:18:27.840 industry and the monitoring of security of supply, because very 0:18:27.880 --> 0:18:31.040 scarily in a dry yet last year we got down 0:18:31.080 --> 0:18:34.960 to days of coal stock file left and for such 0:18:35.000 --> 0:18:40.640 a critical industry, you know, we can't. We can't run 0:18:40.680 --> 0:18:43.639 it like this. We need to be making sure that 0:18:43.680 --> 0:18:48.760 we have that downside risk covered because that's what ultimately 0:18:48.880 --> 0:18:53.679 costs New Zealand businesses so much, either in the price 0:18:53.800 --> 0:18:57.200 that that that risk translates to in terms of higher 0:18:57.200 --> 0:19:01.400 prices in the market or having to down their production, 0:19:01.680 --> 0:19:05.159 which you know, it's bad if we don't. If we 0:19:05.200 --> 0:19:09.159 can't make stuff and ship stuff, we can't earn money 0:19:09.280 --> 0:19:12.560 to build the hospitals and roads and things that we 0:19:12.840 --> 0:19:15.120 need in New Zealand. What do you think of. 0:19:15.080 --> 0:19:20.000 The four gen tailors have got together and sort of 0:19:20.000 --> 0:19:23.000 a backup, if you like, with coal through Genesis and 0:19:23.040 --> 0:19:26.040 they're thinking about they would have an agreement whereby there 0:19:26.040 --> 0:19:28.440 would be a backup using coal and it's got to 0:19:28.480 --> 0:19:32.720 have Commerce Commission approval and the like, but would supposedly 0:19:33.680 --> 0:19:37.800 open the door for retailers like yourselves to have access 0:19:37.800 --> 0:19:39.800 to something like that too. 0:19:40.119 --> 0:19:45.760 Keeping the generation in market is really important because we 0:19:46.720 --> 0:19:50.159 absolutely need it, you mean coal that well. Keeping that 0:19:50.760 --> 0:19:54.560 hunting plant plan in market is really critical because we're 0:19:54.600 --> 0:19:58.359 losing all the gas generation that we have had, so 0:19:58.400 --> 0:20:01.119 we just can't afford to lose it. It's obviously not 0:20:01.200 --> 0:20:03.960 ideal that it's coal, but you know, we've got to 0:20:04.000 --> 0:20:07.720 be pragmatic about these things. I think our preference would 0:20:07.800 --> 0:20:13.560 be for an arrangement that was more accessible for people, 0:20:13.720 --> 0:20:18.760 but I think we'll wait to see what the details 0:20:18.800 --> 0:20:25.200 of that are because there's limited transparency over those around 0:20:25.200 --> 0:20:29.359 those arrangements at the moment, so it's actually quite hard 0:20:29.359 --> 0:20:32.800 to comment on whether they're good or bad. But I 0:20:32.840 --> 0:20:36.320 think there is a comment to be made around the 0:20:36.400 --> 0:20:41.480 suggestions that contracting will happen off the back of it. 0:20:41.640 --> 0:20:45.640 What we've seen previously is actually there's been ongoing issues 0:20:45.680 --> 0:20:49.520 around that contracting and continuous refusals to supply. So I 0:20:49.560 --> 0:20:55.679 think as part of the Commerce Commissions approval of that, 0:20:56.600 --> 0:21:01.439 assuming that happens, that they should be putting a conditions 0:21:01.160 --> 0:21:05.119 on it, that there's a commitment around the volume of 0:21:05.560 --> 0:21:10.000 trading that happens off the back of these arrangements, because 0:21:10.040 --> 0:21:13.359 I think, you know, otherwise it's a hollow promise that 0:21:13.840 --> 0:21:16.800 based on previous behavior hasn't borne out. 0:21:17.320 --> 0:21:19.840 So do you mean that like at the moment, as 0:21:20.119 --> 0:21:24.760 a generation retailer, you can it would appear. I don't 0:21:24.760 --> 0:21:26.919 know if this is actually how it happens, but they 0:21:26.960 --> 0:21:29.640 would be able to sort of favor their own retail arm. 0:21:30.040 --> 0:21:34.800 That plus, as some of the work from the electricity 0:21:34.840 --> 0:21:37.679 authority has picked up, there's been an ongoing issue of 0:21:37.720 --> 0:21:41.800 just refusal to supply, so refusal to engage in contracting, 0:21:42.320 --> 0:21:46.159 and very very low volumes of trading. So those are 0:21:46.200 --> 0:21:51.320 some of the problems that make it really unsustainable for 0:21:51.760 --> 0:21:55.560 independent generators and retailers to come into the market because 0:21:56.240 --> 0:22:00.480 you need a level of liquidity in the market to 0:22:00.480 --> 0:22:05.200 to make things work effectively to met Just still. 0:22:05.040 --> 0:22:09.840 On the independent retailer generator or retailer question, I mean 0:22:10.160 --> 0:22:13.040 a lot of commentators, particularly Obseas, talk about New Zealand 0:22:13.080 --> 0:22:17.760 having about fifty Is that actually right? I mean, is 0:22:17.800 --> 0:22:20.560 that the amount of choice that consumers. 0:22:20.040 --> 0:22:22.680 Really do have? No, it's not. It's I mean, there's 0:22:22.760 --> 0:22:26.520 fifty registered on the yahah, but like some of them 0:22:26.560 --> 0:22:30.800 are random people or you know, it might be a 0:22:30.800 --> 0:22:35.440 local airport that's just covering the shops in that airport. 0:22:36.760 --> 0:22:40.320 So I think there's the if you look at the 0:22:40.520 --> 0:22:47.280 level of available offers to consumers, that's actually declined significantly 0:22:47.320 --> 0:22:52.560 over recent years. So we've had we've you know, we've 0:22:52.600 --> 0:22:56.280 got about eighty seven percent of the retail market concentrated 0:22:56.320 --> 0:23:00.480 in the Big four. We've had Flick going to Meridian Edge. 0:23:00.760 --> 0:23:06.040 We've had Energy Club got sucked up a few years ago, 0:23:06.200 --> 0:23:13.159 We've had Ecotricity acquired by Genesis. There's there's increasing contraction 0:23:13.680 --> 0:23:19.000 concentration and less options available for consumers as a result. 0:23:19.400 --> 0:23:24.399 And I think you that that bears out in the 0:23:24.480 --> 0:23:29.600 data around the offers available to consumers and how innovative 0:23:29.640 --> 0:23:33.679 they are or not. And also, you know, we have 0:23:33.840 --> 0:23:39.520 seen that when when independent retailers come out of market, 0:23:39.800 --> 0:23:44.120 like last year when Electric Key we stopped accepting customers immediately, 0:23:44.200 --> 0:23:46.960 there was actually quite a significant increase in the prices 0:23:47.000 --> 0:23:50.760 from the Big four that were on power Switch. So 0:23:50.920 --> 0:23:55.840 I think there's a really important dynamic that that independent 0:23:55.960 --> 0:24:00.480 competition introduces that is around price, but it's also around 0:24:00.600 --> 0:24:05.439 the innovation that delivers lower cost for consumers. So that 0:24:05.520 --> 0:24:09.919 would be things like if you look at the independence 0:24:09.960 --> 0:24:13.480 the pioneering things like hour of power, the use of 0:24:13.520 --> 0:24:18.520 hot water control, time of use, tariffs, each of these 0:24:19.720 --> 0:24:25.320 can actually deliver material savings to the end consumer. And 0:24:25.359 --> 0:24:28.879 we want to we want that dynamic to continue because 0:24:28.920 --> 0:24:32.520 one of the biggest opportunities we have in driving down 0:24:32.560 --> 0:24:37.280 the cost of energy for end consumers is actually engaging 0:24:37.320 --> 0:24:43.040 that demand side more smartly, so that ability to if 0:24:43.040 --> 0:24:47.640 you think about your energy usage, there's probably about sixty 0:24:47.680 --> 0:24:50.560 percent of it that can be shifted to any time 0:24:50.600 --> 0:24:55.120 of day without it interrupting your lifestyle, and that at 0:24:55.119 --> 0:24:57.520 the moment that doesn't happen, and it's how do we 0:24:57.560 --> 0:25:00.320 make that happen, Because if we could shift that into 0:25:00.359 --> 0:25:02.800 the times when we've got like an abundance of wind 0:25:02.880 --> 0:25:09.560 and prices are lower, it allows us both to reduce 0:25:09.680 --> 0:25:16.760 the cost of your bill is a household, but also 0:25:17.119 --> 0:25:22.719 it will help us accelerate the rate at which we 0:25:22.840 --> 0:25:27.239 bring renewables into the energy system. And equally, you know, 0:25:27.359 --> 0:25:30.959 a lot of the cost for consumers will be driven 0:25:31.080 --> 0:25:36.040 from how much lines capacity we need to build. And 0:25:36.119 --> 0:25:39.880 if we can do things like avoid charging our vehicles 0:25:39.880 --> 0:25:46.080 at peak, this will stop us having to invest significantly 0:25:46.320 --> 0:25:50.119 in really expensive poles and wires and transformers and things. 0:25:51.359 --> 0:25:54.360 It will mean that we can use the existing infrastructure 0:25:54.480 --> 0:25:57.399 much more smartly. So that's part of the role of 0:25:57.880 --> 0:26:04.320 retailers is to bring more dynamicism in the way that 0:26:04.960 --> 0:26:08.960 doesn't put the burden on consumers in terms of mental overhead, 0:26:08.960 --> 0:26:10.680 but just makes it easier for them. 0:26:11.359 --> 0:26:14.800 Is that not happening now? Then surely there is innovation 0:26:14.960 --> 0:26:18.600 going on. Given the competition even between the four dentators 0:26:18.600 --> 0:26:19.640 for example. 0:26:20.080 --> 0:26:22.840 It's been limited. So as a result, we've seen that 0:26:22.880 --> 0:26:27.600 the electricity authorities actually regulated the large four to require 0:26:27.640 --> 0:26:33.160 them to offer time abuse tariffs. And you know they're 0:26:33.200 --> 0:26:35.720 not all the same, so some of them were quick 0:26:35.800 --> 0:26:39.480 to embrace things like hot water others that's taken them 0:26:39.880 --> 0:26:45.239 four years to enable that for consumers, and speaking as 0:26:45.280 --> 0:26:48.000 a retailer, that's not a hard thing to enable. 0:26:48.320 --> 0:26:51.359 Just thinking too, then of investors here, given that that's 0:26:51.359 --> 0:26:54.520 our audience and the situation at the moment, I mean, 0:26:54.560 --> 0:26:58.439 there's a lot of enthusiasm about investing in energy. As 0:26:58.440 --> 0:26:59.879 you said it, you know, it's kind of the corners 0:27:00.080 --> 0:27:02.840 own of our lives and the economy to some degree. 0:27:03.160 --> 0:27:06.840 What would you say to retail investors when they're faced 0:27:06.840 --> 0:27:09.960 with the situation we have now there's a lot of 0:27:10.080 --> 0:27:13.480 change probably about to happen, or who knows really what 0:27:13.480 --> 0:27:16.280 what that will end up being. But if they're looking 0:27:17.080 --> 0:27:20.399 our investors particularly, I really can on innovation and tech 0:27:20.920 --> 0:27:22.879 and you know, what would you say to them about 0:27:23.240 --> 0:27:25.320 thinking about where they put their money in terms of 0:27:25.359 --> 0:27:28.639 the sectors. I mean it's apart from some of the 0:27:28.680 --> 0:27:32.640