1 00:00:00,240 --> 00:00:02,240 Speaker 1: Hi everyone. So years ago, my wife and I were 2 00:00:02,279 --> 00:00:04,880 Speaker 1: invited to attend an event called the Green Ball, one 3 00:00:04,920 --> 00:00:07,240 Speaker 1: of the celebrations in d C is part of Obama's 4 00:00:07,240 --> 00:00:11,160 Speaker 1: second inauguration, so you know, dressing up, dinner, dancing. As 5 00:00:11,160 --> 00:00:12,879 Speaker 1: it was winding down, we found ourselves on the street 6 00:00:12,880 --> 00:00:16,159 Speaker 1: looking for a taxi home. People everywhere, nothing available. My 7 00:00:16,239 --> 00:00:18,520 Speaker 1: wife and heels two a m the three miles to 8 00:00:18,520 --> 00:00:20,400 Speaker 1: our flat and Capitol Hill was a bit too far 9 00:00:20,440 --> 00:00:23,520 Speaker 1: to walk. What to do? Well? I had a thought, 10 00:00:24,000 --> 00:00:25,960 Speaker 1: how about I try this new app I downloaded a 11 00:00:26,000 --> 00:00:28,960 Speaker 1: few weeks prior Uber. I did in a black Lincoln 12 00:00:29,000 --> 00:00:30,560 Speaker 1: town car, showed up a few minutes later to take 13 00:00:30,640 --> 00:00:33,000 Speaker 1: us home. It was perfect. You know the rest of 14 00:00:33,000 --> 00:00:35,280 Speaker 1: the story. The app, the business model turned out to 15 00:00:35,280 --> 00:00:37,879 Speaker 1: be a game changer for so many. Okay, so think 16 00:00:37,920 --> 00:00:40,519 Speaker 1: about your first time hearing about or using Uber or 17 00:00:40,560 --> 00:00:43,199 Speaker 1: Deity or Netflix or Amazon Prime or Delivery or we 18 00:00:43,240 --> 00:00:45,599 Speaker 1: Were or any other business model that's a departure from 19 00:00:45,600 --> 00:00:47,360 Speaker 1: what you're used to. Did it solve a real problem 20 00:00:47,440 --> 00:00:49,600 Speaker 1: for you, did it save you money or time? Or 21 00:00:49,680 --> 00:00:51,720 Speaker 1: was it really just fun to use? Today we're going 22 00:00:51,760 --> 00:00:55,640 Speaker 1: to talk about new business models, specifically new business models 23 00:00:55,680 --> 00:00:57,840 Speaker 1: being applied to a domain. I personally haven't given much 24 00:00:57,880 --> 00:01:01,520 Speaker 1: thought my monthly electricity bill. James Sprints, head of decentralized 25 00:01:01,600 --> 00:01:03,440 Speaker 1: Energy for BENF, came into the studio to talk with 26 00:01:03,520 --> 00:01:05,080 Speaker 1: Dana and me to give us the story on what's 27 00:01:05,080 --> 00:01:08,840 Speaker 1: new and retail electricity. Full disclosure, I really wasn't prepared 28 00:01:08,840 --> 00:01:11,040 Speaker 1: for just how interesting this conversation turned out to be. 29 00:01:11,319 --> 00:01:14,280 Speaker 1: It's based on a report called Company Profiles New Residential 30 00:01:14,319 --> 00:01:17,160 Speaker 1: Retail Models by Michael Kennefi. BENO clients can find it 31 00:01:17,240 --> 00:01:19,840 Speaker 1: via quick search on benf dot com, the benof mobile app, 32 00:01:19,959 --> 00:01:22,720 Speaker 1: or benfc on terminal. Please note that BENIF does not 33 00:01:22,760 --> 00:01:24,640 Speaker 1: provide investment or strategy advice, and you can hear a 34 00:01:24,640 --> 00:01:26,920 Speaker 1: full disclaimer at the end of the show. I'm Mark 35 00:01:26,959 --> 00:01:29,280 Speaker 1: Taylor here with Dana Perkins, and you're listening to switch 36 00:01:29,360 --> 00:01:35,760 Speaker 1: on the BENF podcast. James, welcome, I must to be here. 37 00:01:36,040 --> 00:01:40,240 Speaker 1: You've titled this note company Profiles New Residential Retail Models, 38 00:01:40,560 --> 00:01:42,680 Speaker 1: and um, I'm not gonna lie that the title is 39 00:01:42,720 --> 00:01:45,080 Speaker 1: a little bland for what is a pretty spicy note. 40 00:01:45,480 --> 00:01:51,040 Speaker 1: So we're a compliment, yes, And the reason um I 41 00:01:51,080 --> 00:01:52,720 Speaker 1: really like this note is actually so we as a 42 00:01:52,760 --> 00:01:55,600 Speaker 1: business a little bit of backstory. We write these focus 43 00:01:55,600 --> 00:01:58,080 Speaker 1: areas every year, these big questions that we think that 44 00:01:58,160 --> 00:02:01,960 Speaker 1: our clients are asking about changes within the industry, and 45 00:02:02,440 --> 00:02:05,920 Speaker 1: actually what's happening within the utility sector from a residential 46 00:02:05,960 --> 00:02:09,679 Speaker 1: retail model has come up again and again. What I'm 47 00:02:09,720 --> 00:02:12,000 Speaker 1: seeing in this note is maybe, and you can tell 48 00:02:12,040 --> 00:02:15,000 Speaker 1: me whether or not I'm right or wrong, but maybe 49 00:02:15,320 --> 00:02:17,680 Speaker 1: we're actually seeing some of this change that everybody has 50 00:02:17,720 --> 00:02:20,160 Speaker 1: been talking about saying we know it needs to change, 51 00:02:20,320 --> 00:02:22,679 Speaker 1: but we don't really know what to do. Suddenly there 52 00:02:22,760 --> 00:02:24,480 Speaker 1: is a lot of disruption in the space, with a 53 00:02:24,480 --> 00:02:27,200 Speaker 1: lot of different companies looking at various different business models, 54 00:02:27,200 --> 00:02:30,040 Speaker 1: which you're trying to tease out here. Am I making 55 00:02:30,080 --> 00:02:32,560 Speaker 1: this up? Or is now the time where suddenly there's 56 00:02:32,600 --> 00:02:34,800 Speaker 1: all this movement? Yeah? I mean, I think it's something 57 00:02:34,840 --> 00:02:37,840 Speaker 1: that has been bubbling up over the last couple of years. 58 00:02:37,840 --> 00:02:40,440 Speaker 1: But today we can definitely see in a number of 59 00:02:40,480 --> 00:02:44,639 Speaker 1: markets globally um a whole lot of new companies coming 60 00:02:44,639 --> 00:02:47,480 Speaker 1: to market that are trying new things. The UK is 61 00:02:47,480 --> 00:02:50,200 Speaker 1: a very good example of that. I mean, the number 62 00:02:50,240 --> 00:02:54,239 Speaker 1: of companies selling gas and electricity has grown dramatically of 63 00:02:54,280 --> 00:02:58,000 Speaker 1: the last four or five years, but it's also happening Australia, 64 00:02:58,560 --> 00:03:01,919 Speaker 1: certainly happening in Japan. So today really is a time 65 00:03:01,960 --> 00:03:04,519 Speaker 1: when rather than just talking out this stuff coming down 66 00:03:04,520 --> 00:03:06,680 Speaker 1: the pipe, there's a lot of examples to point to. 67 00:03:06,800 --> 00:03:08,480 Speaker 1: And what we really wanted to do with the note 68 00:03:08,639 --> 00:03:12,040 Speaker 1: was look at some of the companies, But it's almost 69 00:03:12,040 --> 00:03:14,800 Speaker 1: that the companies aren't really the specific point. It was 70 00:03:14,840 --> 00:03:17,560 Speaker 1: more using those companies to highlight that there are these 71 00:03:17,600 --> 00:03:19,480 Speaker 1: different models and each one of them is kind of 72 00:03:19,480 --> 00:03:23,560 Speaker 1: doing something different and trying to develop new ways to 73 00:03:23,639 --> 00:03:26,880 Speaker 1: actually sell electricity to people rather than just saying we're 74 00:03:26,919 --> 00:03:29,280 Speaker 1: going to charge a dollar per killer one hour. There's 75 00:03:29,680 --> 00:03:31,880 Speaker 1: many different models that you can use to do that, 76 00:03:32,120 --> 00:03:34,840 Speaker 1: and I really think it's kind of a replication of 77 00:03:35,080 --> 00:03:38,800 Speaker 1: changes we're seeing in many different industries around the world 78 00:03:39,080 --> 00:03:42,040 Speaker 1: where people are pricing services in a different way, and 79 00:03:42,400 --> 00:03:43,880 Speaker 1: that's kind of what a lot of these companies are 80 00:03:43,880 --> 00:03:46,320 Speaker 1: trying to do. Do you think you could simply explain 81 00:03:46,400 --> 00:03:48,440 Speaker 1: what some of these different business models are, because one 82 00:03:48,440 --> 00:03:50,000 Speaker 1: of them I see in there is all you can eat, 83 00:03:50,040 --> 00:03:53,720 Speaker 1: So they're your electricity buffet. What else is there? Yeah, 84 00:03:53,760 --> 00:03:55,320 Speaker 1: so the all you can eat is the most simple one. 85 00:03:55,360 --> 00:03:59,040 Speaker 1: It's basically you're paying a fixed for every month benefit 86 00:03:59,080 --> 00:04:02,040 Speaker 1: for you, I guess is eliminating any kind of volatility 87 00:04:02,040 --> 00:04:04,560 Speaker 1: in your bill. Um. But you pay a premium for that, 88 00:04:04,720 --> 00:04:08,440 Speaker 1: So you're basically put all your kind of risk and 89 00:04:08,520 --> 00:04:10,960 Speaker 1: how much you're going to consume that's now shifted entirely 90 00:04:11,000 --> 00:04:12,800 Speaker 1: onto your supplier. So they're going to charge you more 91 00:04:12,840 --> 00:04:14,600 Speaker 1: for that. But there's no re bound, right, I'm not 92 00:04:14,600 --> 00:04:17,240 Speaker 1: going to be able to start mining bitcoin on it. Well, 93 00:04:17,279 --> 00:04:19,599 Speaker 1: it actually depends. I mean, so some of the companies 94 00:04:19,640 --> 00:04:23,160 Speaker 1: do have um kind of fair use policies they'd say 95 00:04:23,320 --> 00:04:27,000 Speaker 1: UM and so Origin in Australia, which is one of 96 00:04:27,040 --> 00:04:29,680 Speaker 1: the big three energy supplies, they're they're actually one of 97 00:04:29,720 --> 00:04:31,839 Speaker 1: the few examples we found of a kind of incumbent 98 00:04:31,920 --> 00:04:35,039 Speaker 1: trying some of these new things. They have fair use policies, 99 00:04:35,040 --> 00:04:36,400 Speaker 1: and I think it was something like five percent of 100 00:04:36,440 --> 00:04:39,440 Speaker 1: customers they ended up um kind of moving off that 101 00:04:39,440 --> 00:04:41,560 Speaker 1: that tarrent because they thought they were violating that. Some 102 00:04:41,600 --> 00:04:44,240 Speaker 1: of the other companies actually don't do that, and you 103 00:04:44,279 --> 00:04:47,320 Speaker 1: know they're saying they're able to manage that risk through 104 00:04:47,720 --> 00:04:49,360 Speaker 1: I guess the way they're they're trading in the market 105 00:04:49,400 --> 00:04:51,320 Speaker 1: and things like that. But yeah, so that that's the 106 00:04:51,360 --> 00:04:54,360 Speaker 1: simplest model. One of the more interesting ones is what 107 00:04:54,400 --> 00:04:58,000 Speaker 1: we've termed wholesale passed through. So that's essentially you're paying 108 00:04:58,440 --> 00:05:01,039 Speaker 1: you know, a fixed amount per month to the company. 109 00:05:01,080 --> 00:05:03,719 Speaker 1: I actually was doing this in New York where I 110 00:05:03,760 --> 00:05:07,800 Speaker 1: live as a customer. Yeah, so paying what worked out 111 00:05:07,839 --> 00:05:10,400 Speaker 1: about a dollar a week to this company, UM, and 112 00:05:10,440 --> 00:05:13,479 Speaker 1: then everything I paid on top of that was um 113 00:05:13,520 --> 00:05:17,040 Speaker 1: the wholesale price for power, ignoring the kind of transmission 114 00:05:17,040 --> 00:05:19,679 Speaker 1: distribution charges, will put that aside for the moment. So 115 00:05:19,880 --> 00:05:21,800 Speaker 1: there's a couple of different companies that are trying that. 116 00:05:22,040 --> 00:05:24,000 Speaker 1: Some of them the one I'm doing New York, they're 117 00:05:24,000 --> 00:05:26,760 Speaker 1: really just using the day ahead price, and you know 118 00:05:26,880 --> 00:05:29,279 Speaker 1: that's not that sophisticated, but some of the companies are 119 00:05:29,360 --> 00:05:32,640 Speaker 1: using real time market prices. So the idea is that 120 00:05:32,680 --> 00:05:34,680 Speaker 1: they're getting rid of kind of a lot of the 121 00:05:35,000 --> 00:05:38,320 Speaker 1: overheads and margins that you're paying to supplier, so your 122 00:05:38,360 --> 00:05:41,280 Speaker 1: total bill should be cheaper, but it's could be very 123 00:05:41,360 --> 00:05:44,280 Speaker 1: very volatile UM and so you know, depending on which 124 00:05:44,320 --> 00:05:46,040 Speaker 1: mark you're in, it could be a really cold winter, 125 00:05:46,680 --> 00:05:50,000 Speaker 1: a really hot summer. Energy prices go really high and 126 00:05:50,000 --> 00:05:53,040 Speaker 1: suddenly your bill goes through the roof. So that's it's 127 00:05:53,080 --> 00:05:54,640 Speaker 1: kind of like the opposite of the flat fee. You're 128 00:05:54,760 --> 00:05:57,000 Speaker 1: as the customer taking on a lot more risk and 129 00:05:57,080 --> 00:06:01,280 Speaker 1: completely depending on time of use as well. So you 130 00:06:01,320 --> 00:06:05,400 Speaker 1: would then theoretically be incentivized to turn on your washing machines, 131 00:06:05,440 --> 00:06:10,000 Speaker 1: for example, either overnight or maybe midday when he is 132 00:06:10,000 --> 00:06:12,480 Speaker 1: in the office exactly. And so you know, there's a 133 00:06:12,520 --> 00:06:14,440 Speaker 1: company called Griddy that that was actually the first one 134 00:06:14,480 --> 00:06:16,080 Speaker 1: we heard of doing this a couple of years ago, 135 00:06:16,080 --> 00:06:18,120 Speaker 1: and we did a short case study on them, which 136 00:06:18,160 --> 00:06:20,480 Speaker 1: was really the idea for doing more on this topic 137 00:06:20,680 --> 00:06:22,680 Speaker 1: for this note. And they try and send alerts to 138 00:06:22,720 --> 00:06:24,560 Speaker 1: customers to a mobile app and things like that to 139 00:06:24,920 --> 00:06:28,320 Speaker 1: try and change people's consumption in response to prices. And 140 00:06:28,360 --> 00:06:30,040 Speaker 1: what a lot of you know, the different companies we've 141 00:06:30,040 --> 00:06:31,760 Speaker 1: seen who are doing this is more and more of 142 00:06:31,760 --> 00:06:35,600 Speaker 1: them are trying to kind of integrate smart home technologies 143 00:06:35,640 --> 00:06:38,279 Speaker 1: with what they offer. You know, if this then that 144 00:06:38,560 --> 00:06:40,160 Speaker 1: is that something you kinds have heard. I mean, that's 145 00:06:40,160 --> 00:06:42,960 Speaker 1: basically a T T T Yeah exactly. Um, it's a 146 00:06:43,080 --> 00:06:45,120 Speaker 1: kind of a I guess, how would you describe it. 147 00:06:45,120 --> 00:06:48,200 Speaker 1: I mean, it's basically it's a website that takes Internet 148 00:06:48,240 --> 00:06:51,320 Speaker 1: actions and let you create rules around them exactly, so 149 00:06:51,400 --> 00:06:53,360 Speaker 1: you can kind of get a device in your home 150 00:06:53,600 --> 00:06:57,040 Speaker 1: to turn on off if the price is X, and 151 00:06:57,080 --> 00:06:59,040 Speaker 1: so more of them are trying to push that kind 152 00:06:59,040 --> 00:07:01,320 Speaker 1: of thing, I think at the very very early stages 153 00:07:01,360 --> 00:07:04,520 Speaker 1: of that, partly because not that many customers have enough 154 00:07:04,680 --> 00:07:06,680 Speaker 1: devices in their home that are going to be able 155 00:07:06,720 --> 00:07:08,479 Speaker 1: to make use of that, and I think that the 156 00:07:08,520 --> 00:07:10,800 Speaker 1: companies are just really beginning to get their heads around 157 00:07:11,200 --> 00:07:12,960 Speaker 1: kind of what the potential of that is. But that's 158 00:07:13,040 --> 00:07:15,720 Speaker 1: kind of the in principle the direction of travel. So 159 00:07:15,720 --> 00:07:18,880 Speaker 1: you've outlined two kind of competing business models here that 160 00:07:18,920 --> 00:07:22,400 Speaker 1: are competing with what we currently have, which is it's 161 00:07:22,680 --> 00:07:25,400 Speaker 1: a little bit variable, but it's variable on a daily 162 00:07:25,440 --> 00:07:29,640 Speaker 1: basis rather than on an hourly or flat fee for 163 00:07:29,680 --> 00:07:32,720 Speaker 1: the month basis. So my question is, are you going 164 00:07:32,760 --> 00:07:35,560 Speaker 1: to see all of these competing in the same locations 165 00:07:35,600 --> 00:07:38,320 Speaker 1: all at once, or you're going to see different regions 166 00:07:38,360 --> 00:07:40,720 Speaker 1: kind of having ones that are taking over, but maybe 167 00:07:40,720 --> 00:07:43,520 Speaker 1: they're differing from region to region. Yeah, I think, I 168 00:07:43,520 --> 00:07:46,400 Speaker 1: mean we already as seeing different versions of this competing 169 00:07:46,640 --> 00:07:49,760 Speaker 1: in the same regions, and I would expect that to continue, 170 00:07:49,880 --> 00:07:54,720 Speaker 1: I think, by the same suppliers potentially so far. Because 171 00:07:54,800 --> 00:07:58,040 Speaker 1: in this note we're predominantly looking at startups. A lot 172 00:07:58,080 --> 00:08:00,840 Speaker 1: of them have focused on one particular model and they're 173 00:08:00,880 --> 00:08:04,240 Speaker 1: deciding to do that particular approach, and maybe they offer 174 00:08:04,400 --> 00:08:06,640 Speaker 1: two or three tariffs, but they're all kind of variations 175 00:08:06,640 --> 00:08:10,200 Speaker 1: around the same idea. And I think when you think 176 00:08:10,200 --> 00:08:12,480 Speaker 1: about those two different models and now are the ones 177 00:08:12,520 --> 00:08:14,440 Speaker 1: that are more related to distributed energy that maybe we 178 00:08:14,480 --> 00:08:16,560 Speaker 1: can discuss a bit later. But if you think about 179 00:08:16,560 --> 00:08:19,320 Speaker 1: those two extremes, they're really appealing to two very different 180 00:08:19,360 --> 00:08:21,680 Speaker 1: types of people. So on the one hand, you have 181 00:08:21,800 --> 00:08:24,800 Speaker 1: someone who wants to fix feed that's someone who's really 182 00:08:25,280 --> 00:08:28,880 Speaker 1: totally uninterested in the dynamics of the energy market, but 183 00:08:29,040 --> 00:08:31,680 Speaker 1: I really just want stability, and they want to pay 184 00:08:31,720 --> 00:08:34,760 Speaker 1: a monthly subscription for something which there's a number of 185 00:08:34,800 --> 00:08:36,720 Speaker 1: services you now get in your home where you're doing that, 186 00:08:36,720 --> 00:08:38,600 Speaker 1: why shouldn't it be the same for energy, So that 187 00:08:38,600 --> 00:08:42,280 Speaker 1: that's kind of that customer. The other extreme is someone 188 00:08:42,280 --> 00:08:45,280 Speaker 1: who is much more engaged with their energy used potentially 189 00:08:45,400 --> 00:08:47,600 Speaker 1: or thinking about what's going on in the energy market, 190 00:08:47,880 --> 00:08:50,360 Speaker 1: or maybe just someone who's very very price conscious and 191 00:08:50,400 --> 00:08:53,240 Speaker 1: there is for is willing to modify their behavior in 192 00:08:53,360 --> 00:08:57,800 Speaker 1: response to that real time wholesale market signal. So I 193 00:08:57,840 --> 00:09:01,240 Speaker 1: think I fault definitely in the former, But it seems 194 00:09:01,280 --> 00:09:03,680 Speaker 1: like you're much more of an experiment or like, you know, 195 00:09:03,720 --> 00:09:06,120 Speaker 1: this is what you do for a living, really test 196 00:09:06,160 --> 00:09:08,240 Speaker 1: the stuff out. So you said you're also a customer 197 00:09:08,240 --> 00:09:11,160 Speaker 1: of the wholesale Pathroough model. Do you test out other models? 198 00:09:11,320 --> 00:09:14,080 Speaker 1: And the sub question to that is do people really 199 00:09:14,120 --> 00:09:17,280 Speaker 1: care enough to change their model to take advantage of 200 00:09:17,360 --> 00:09:20,599 Speaker 1: these things? Yeah, I mean I think I am skeptical 201 00:09:20,800 --> 00:09:24,200 Speaker 1: about a lot of these models because of that consumer apathy, 202 00:09:24,280 --> 00:09:27,880 Speaker 1: because I don't think I'm a good representation of most 203 00:09:27,880 --> 00:09:31,760 Speaker 1: people actually work in the energy sector, so I'm interested 204 00:09:31,800 --> 00:09:34,560 Speaker 1: in testing these things out. I don't think most people 205 00:09:35,080 --> 00:09:38,360 Speaker 1: care enough to want to go onto a tariff that 206 00:09:38,440 --> 00:09:41,080 Speaker 1: requires some kind of level of engagement. So that's why 207 00:09:41,520 --> 00:09:43,840 Speaker 1: I think the kind of smart home integration pieces quite 208 00:09:43,880 --> 00:09:47,160 Speaker 1: important because you can imagine a scenario in which you 209 00:09:47,200 --> 00:09:49,960 Speaker 1: have enough devices in your home and let's say you 210 00:09:50,000 --> 00:09:52,959 Speaker 1: actually somebody maybe has an electric vehicle, a large load 211 00:09:53,840 --> 00:09:56,440 Speaker 1: potentially storage and future though obviously the number of people 212 00:09:56,440 --> 00:09:58,480 Speaker 1: with that today is very low, and you can move 213 00:09:58,480 --> 00:10:00,160 Speaker 1: onto this model and you don't really need to think 214 00:10:00,160 --> 00:10:02,840 Speaker 1: about it because it's all happening behind the scenes automatically. 215 00:10:02,920 --> 00:10:06,200 Speaker 1: It's changing how you use energy to maximize the value 216 00:10:06,240 --> 00:10:08,319 Speaker 1: for you. But we're pretty far away from that being 217 00:10:08,920 --> 00:10:12,720 Speaker 1: the reality for for most people. So to me, I 218 00:10:12,760 --> 00:10:15,640 Speaker 1: struggle to see their being widespread a option with these 219 00:10:15,720 --> 00:10:20,600 Speaker 1: kind of real time models because it's complex and confusing 220 00:10:20,679 --> 00:10:23,760 Speaker 1: and it requires a level of interest that the reality. 221 00:10:23,880 --> 00:10:25,840 Speaker 1: You know, the one thing we do know about energy 222 00:10:25,880 --> 00:10:28,680 Speaker 1: and how people interact that people don't care. I think 223 00:10:28,720 --> 00:10:31,480 Speaker 1: everything we've seen in the kind of home energy management 224 00:10:31,480 --> 00:10:35,080 Speaker 1: market of different smart devices is that you get some traction, 225 00:10:35,120 --> 00:10:37,240 Speaker 1: but the majority of people just simply do not care. 226 00:10:38,080 --> 00:10:41,920 Speaker 1: I'll agree with that sounds very negative. Well, you already 227 00:10:41,960 --> 00:10:45,240 Speaker 1: have price comparison sites and people probably spending too much. 228 00:10:45,760 --> 00:10:48,520 Speaker 1: I always think to myself, like I should go on 229 00:10:48,520 --> 00:10:51,120 Speaker 1: one of those press comparations. I never do. I mean, 230 00:10:51,120 --> 00:10:53,240 Speaker 1: it's a really important thing, right that, Like in a 231 00:10:53,280 --> 00:10:55,840 Speaker 1: lot of markets where there is competition and people can 232 00:10:56,040 --> 00:10:58,400 Speaker 1: choose their electricity supply, which is obviously not the case 233 00:10:58,440 --> 00:11:02,360 Speaker 1: in everywhere it's it's actually, relatively in the UK particulars 234 00:11:02,400 --> 00:11:05,760 Speaker 1: incredibly easy to switch your energy supplier. Yet a large number, 235 00:11:05,760 --> 00:11:07,880 Speaker 1: if not the majority, of people are paying too much 236 00:11:07,920 --> 00:11:10,360 Speaker 1: money and they're on the wrong supplier. And so I 237 00:11:10,360 --> 00:11:13,440 Speaker 1: think that is just a very strong indication that most 238 00:11:13,480 --> 00:11:15,640 Speaker 1: people are not going to be interested in moving to 239 00:11:15,760 --> 00:11:19,480 Speaker 1: these new models, because you know, if they were interested, 240 00:11:19,800 --> 00:11:21,880 Speaker 1: they could have done it already. Um, is it a 241 00:11:21,960 --> 00:11:24,600 Speaker 1: question of getting the incentive rate like the gimmick? Yeah? 242 00:11:24,640 --> 00:11:26,559 Speaker 1: I mean well, I mean, actually, you know, one of 243 00:11:26,600 --> 00:11:28,120 Speaker 1: the things that is interesting is that in the UK 244 00:11:28,679 --> 00:11:30,520 Speaker 1: there are, as I said at the beginning, a number 245 00:11:30,520 --> 00:11:33,079 Speaker 1: of new energy suppliers, not all of them trying these 246 00:11:33,080 --> 00:11:35,480 Speaker 1: new models. I mean a lot of those new suppliers 247 00:11:35,520 --> 00:11:37,839 Speaker 1: are selling energy in the traditional way. It's just they're 248 00:11:37,880 --> 00:11:39,920 Speaker 1: selling a lot of maybe a lot of it's renewable 249 00:11:40,200 --> 00:11:42,319 Speaker 1: um and you know, they have a better branding. But 250 00:11:42,360 --> 00:11:45,080 Speaker 1: a lot of them are growing pretty rapidly. And you know, 251 00:11:45,160 --> 00:11:47,400 Speaker 1: Bulb is one that a lot of people are familiar 252 00:11:47,440 --> 00:11:50,000 Speaker 1: with us growing very rapidly. Number of other companies as well, 253 00:11:50,080 --> 00:11:52,280 Speaker 1: and I think that's because people may not be engaged 254 00:11:52,320 --> 00:11:55,160 Speaker 1: with energy, but they're pretty unhappy with their incumbents, and 255 00:11:55,160 --> 00:11:59,160 Speaker 1: I think there's a level of dissatisfaction basically with the 256 00:11:59,200 --> 00:12:02,599 Speaker 1: status quo, and so not all customers, um, but I 257 00:12:02,600 --> 00:12:05,560 Speaker 1: actually think probably a younger segment of customers who are 258 00:12:05,679 --> 00:12:09,640 Speaker 1: used to having services that they buy that work fairly, seamlessly, 259 00:12:09,840 --> 00:12:12,600 Speaker 1: can be done all online, are easy to use, and 260 00:12:12,600 --> 00:12:16,640 Speaker 1: they expect that level of quality from any service they procure, 261 00:12:16,679 --> 00:12:19,320 Speaker 1: and so kind of unhappy with the utility sector that 262 00:12:19,360 --> 00:12:23,079 Speaker 1: has seen, I guess has been slow to to move 263 00:12:23,120 --> 00:12:26,600 Speaker 1: in that direction and can seem old fashioned. Okay, it 264 00:12:26,679 --> 00:12:28,520 Speaker 1: feels like, you know, the things that would entice me 265 00:12:28,600 --> 00:12:30,679 Speaker 1: to go to a new provider would be like clean 266 00:12:30,760 --> 00:12:32,800 Speaker 1: energy or something like that. But it also seems like 267 00:12:32,840 --> 00:12:35,520 Speaker 1: these new business models are ones that you could run 268 00:12:35,600 --> 00:12:38,840 Speaker 1: off electricity made from whale oil. Right, It really just 269 00:12:38,880 --> 00:12:41,760 Speaker 1: doesn't matter. Is this more of a product story or 270 00:12:41,800 --> 00:12:44,000 Speaker 1: is it a clean energy story wrapped in it? Yeah, 271 00:12:44,080 --> 00:12:46,280 Speaker 1: that that is a great question, because for the most part, 272 00:12:46,320 --> 00:12:49,040 Speaker 1: I think is as you turned up a product story 273 00:12:49,360 --> 00:12:52,200 Speaker 1: that said there are a number of these kind of 274 00:12:52,240 --> 00:12:54,079 Speaker 1: new models and actually the ones we even talked about 275 00:12:54,120 --> 00:12:56,840 Speaker 1: so much, which are very much focused on kind of 276 00:12:56,840 --> 00:13:00,280 Speaker 1: distributed energy and what they're really trying to do is 277 00:13:00,480 --> 00:13:02,719 Speaker 1: tie up the fact that more and more customers are 278 00:13:02,800 --> 00:13:08,280 Speaker 1: adopting solar potentially buying electric vehicles, and then design and 279 00:13:08,360 --> 00:13:13,480 Speaker 1: electricity service around that rather than you know, the status. Obviously, 280 00:13:13,480 --> 00:13:15,640 Speaker 1: if you're a utility selling electricity, you don't want your 281 00:13:15,679 --> 00:13:18,840 Speaker 1: customer to be buying rooftop solver for the most part, 282 00:13:18,840 --> 00:13:20,920 Speaker 1: Whereas these guys are saying, Okay, we recognize people are 283 00:13:20,920 --> 00:13:23,200 Speaker 1: gonna be doing that, what what would be the right 284 00:13:23,400 --> 00:13:26,040 Speaker 1: way of pricing electricity for that customer if they're going 285 00:13:26,040 --> 00:13:27,480 Speaker 1: to be doing that, any letterally get the are you 286 00:13:27,559 --> 00:13:29,440 Speaker 1: gonna eat things like that. Yeah, But also it's more 287 00:13:29,480 --> 00:13:31,040 Speaker 1: that like there's a couple of models we looked at 288 00:13:31,080 --> 00:13:34,920 Speaker 1: where they're kind of basically essentially offering you a solar 289 00:13:35,200 --> 00:13:37,959 Speaker 1: lease for your rooftop system, you know, it's ten or 290 00:13:38,000 --> 00:13:40,480 Speaker 1: twenty year lease, and then wrapped in with that is 291 00:13:40,640 --> 00:13:43,760 Speaker 1: a long time electricity supply contract so that your your 292 00:13:43,880 --> 00:13:46,400 Speaker 1: they then become your electricity supplier for the lifetime of 293 00:13:46,440 --> 00:13:49,079 Speaker 1: that that rooftop system ten or twenty years tenny on 294 00:13:49,120 --> 00:13:54,200 Speaker 1: the the specific model. And yeah, and and obviously that 295 00:13:54,360 --> 00:13:56,319 Speaker 1: as them they're locking in a customer for that amount 296 00:13:56,320 --> 00:13:59,120 Speaker 1: of time, and then kind of one of the more 297 00:13:59,160 --> 00:14:03,840 Speaker 1: interesting one in my mind is um companies that are 298 00:14:04,520 --> 00:14:08,440 Speaker 1: kind of essentially offering storage and selling energy storage to 299 00:14:08,480 --> 00:14:11,360 Speaker 1: a customer, and along with that, they're saying, in addition 300 00:14:11,400 --> 00:14:13,800 Speaker 1: to buying that storage system from us for a certain 301 00:14:13,840 --> 00:14:16,200 Speaker 1: amount of month, we will basically become your energy supplier. 302 00:14:16,559 --> 00:14:19,440 Speaker 1: And what they are then doing is you have to 303 00:14:19,440 --> 00:14:23,400 Speaker 1: have a rooftop solar system. They're then basically balancing between 304 00:14:23,440 --> 00:14:27,880 Speaker 1: all their customers who have that rooftop generation and the 305 00:14:27,880 --> 00:14:31,280 Speaker 1: battery using those two I mean the term people describe 306 00:14:31,280 --> 00:14:33,400 Speaker 1: it as as a virtual power plant, and have a 307 00:14:33,440 --> 00:14:36,240 Speaker 1: virtual power plant amongst these customers balancing all the energy 308 00:14:36,480 --> 00:14:40,400 Speaker 1: and essentially supplying making sure they all get enough energy. Obviously, 309 00:14:40,440 --> 00:14:42,200 Speaker 1: if anything's missing, they can top that up by just 310 00:14:42,240 --> 00:14:44,520 Speaker 1: buying it from from the market. A battery in there 311 00:14:44,720 --> 00:14:46,840 Speaker 1: in the individual home that has the solar on it, 312 00:14:46,960 --> 00:14:50,120 Speaker 1: or a centralized battery that's managed by the utility, because 313 00:14:50,160 --> 00:14:52,600 Speaker 1: we're seeing both of those coming around, right Yeah, So 314 00:14:52,680 --> 00:14:55,080 Speaker 1: in this in this case, it's these are batteries that 315 00:14:55,120 --> 00:14:58,040 Speaker 1: are being deployed in people's homes, and I think that 316 00:14:58,080 --> 00:14:59,920 Speaker 1: to me makes a lot of sense. Because I think 317 00:15:00,160 --> 00:15:02,800 Speaker 1: the kind of customer today who is likely to be 318 00:15:02,880 --> 00:15:06,680 Speaker 1: buying a battery is someone who clearly is very engaged 319 00:15:06,720 --> 00:15:09,760 Speaker 1: with their energy, probably someone who is not that happy 320 00:15:09,760 --> 00:15:12,240 Speaker 1: with their utility. I think there is likely to be 321 00:15:12,320 --> 00:15:15,240 Speaker 1: some kind of relationship between people a bit dissatisfied with 322 00:15:15,240 --> 00:15:19,960 Speaker 1: the status quo. Um, yeah, I mean I think, And 323 00:15:20,000 --> 00:15:22,360 Speaker 1: so they're exactly the kind of customer who you'd expect 324 00:15:22,400 --> 00:15:23,960 Speaker 1: if you're selling them back and say hey, do you 325 00:15:23,960 --> 00:15:26,240 Speaker 1: also want to start buying electricity from us? They're but 326 00:15:26,240 --> 00:15:29,640 Speaker 1: they're likely to say yes. How are these companies differentiating 327 00:15:29,960 --> 00:15:32,000 Speaker 1: one from the other? Because one of the things you 328 00:15:32,040 --> 00:15:34,760 Speaker 1: identify is that this is a space where you've got 329 00:15:34,760 --> 00:15:37,120 Speaker 1: a lot of small startups. You've got the incumbents as 330 00:15:37,120 --> 00:15:39,680 Speaker 1: well participating. But this note specifically gets into some of 331 00:15:39,720 --> 00:15:42,040 Speaker 1: the smaller companies. When you've got a lot, how do 332 00:15:42,080 --> 00:15:44,640 Speaker 1: you pick one over the other? Yeah, I mean I 333 00:15:44,680 --> 00:15:46,800 Speaker 1: think actually at the moment that there's kind of a 334 00:15:46,800 --> 00:15:49,080 Speaker 1: lot in the report that this is a global report 335 00:15:49,160 --> 00:15:52,880 Speaker 1: and actually probably in individual markets there aren't that many 336 00:15:53,200 --> 00:15:56,480 Speaker 1: competing with each other. But yeah, I think it's probably 337 00:15:56,760 --> 00:16:00,440 Speaker 1: all little tinkering around the edges, like how L does 338 00:16:00,520 --> 00:16:03,400 Speaker 1: this company's model, you know, how how are they doing that? 339 00:16:03,480 --> 00:16:05,560 Speaker 1: If this, then that does that integrate with the devices 340 00:16:05,640 --> 00:16:07,120 Speaker 1: I have in my home? Some of them do that, 341 00:16:07,200 --> 00:16:10,120 Speaker 1: some of them don't. So that's kind of one UM differentiation. 342 00:16:10,360 --> 00:16:12,480 Speaker 1: How much how much are they're limiting my risks? So 343 00:16:12,560 --> 00:16:15,320 Speaker 1: for example, the wholesale passed through. Some of them it's 344 00:16:15,360 --> 00:16:18,600 Speaker 1: literally you will pay what the wholesale rate is. Others say, okay, 345 00:16:18,640 --> 00:16:21,760 Speaker 1: we're going to limit the kind of potential downside for you, 346 00:16:21,840 --> 00:16:23,560 Speaker 1: and so there's a cap on how much you can 347 00:16:23,600 --> 00:16:26,160 Speaker 1: pay per month. So there are all of them are 348 00:16:26,160 --> 00:16:29,720 Speaker 1: slightly different, so there is the potential to differentiate UM. 349 00:16:29,760 --> 00:16:32,040 Speaker 1: I think for the most part that it's probably who's 350 00:16:32,040 --> 00:16:34,840 Speaker 1: the company you've heard of in your particular market? Are 351 00:16:34,840 --> 00:16:37,840 Speaker 1: these acquisition targets by the incumbents? Is that what we're 352 00:16:37,840 --> 00:16:39,440 Speaker 1: going to see eventually? Are we going to see many 353 00:16:39,480 --> 00:16:41,440 Speaker 1: of these different types of startups growing or are they 354 00:16:41,480 --> 00:16:44,920 Speaker 1: going to just be features of our in company utility? Yeah, 355 00:16:45,320 --> 00:16:47,200 Speaker 1: I think that would be very interesting to see how 356 00:16:47,200 --> 00:16:49,440 Speaker 1: that plays out. I mean, separately to this, one of 357 00:16:49,440 --> 00:16:51,880 Speaker 1: the things my team has been doing for a while 358 00:16:52,120 --> 00:16:56,160 Speaker 1: is tracking investments in distributed energy from Originally we were 359 00:16:56,280 --> 00:16:59,320 Speaker 1: mainly look at utilities, but also oil and gas companies 360 00:16:59,360 --> 00:17:02,760 Speaker 1: now autom acres, industrials, etcetera. And we're seeing all of 361 00:17:02,760 --> 00:17:07,480 Speaker 1: those groups increasingly developing products and services around distributed energy, 362 00:17:08,119 --> 00:17:12,199 Speaker 1: selling storage, solar, electric, vehicle charging, things like that. So 363 00:17:12,240 --> 00:17:15,680 Speaker 1: there's certainly that's a trend that's already occurring and will 364 00:17:15,720 --> 00:17:19,200 Speaker 1: be interesting to see whether as well as in investing 365 00:17:19,200 --> 00:17:21,680 Speaker 1: in kind of startups selling distributed energy, they now also 366 00:17:21,680 --> 00:17:24,359 Speaker 1: start investing in some of these startups who kind of 367 00:17:24,440 --> 00:17:27,920 Speaker 1: directly compete with their core business. I'm not sure yet 368 00:17:27,920 --> 00:17:30,080 Speaker 1: whether whether we'll start to see that happen. I do 369 00:17:30,160 --> 00:17:33,000 Speaker 1: know that a couple of these companies have received minority 370 00:17:33,080 --> 00:17:36,439 Speaker 1: investment from utilities, and I think, to honest, that's an 371 00:17:36,440 --> 00:17:39,280 Speaker 1: element of probably they want to understand the threat, you know, 372 00:17:39,320 --> 00:17:42,199 Speaker 1: that is that these are direct competitors. Also want to 373 00:17:42,280 --> 00:17:44,440 Speaker 1: understand if they can work to write I mean a 374 00:17:44,480 --> 00:17:47,760 Speaker 1: dollar a week you're paying to utility to this provider 375 00:17:47,920 --> 00:17:50,000 Speaker 1: all you can eat, right, that could go haywire and 376 00:17:50,000 --> 00:17:52,600 Speaker 1: who knows. So what do you think about the probability 377 00:17:52,600 --> 00:17:56,480 Speaker 1: of these features or business models? Yeah, so I am 378 00:17:56,560 --> 00:17:58,520 Speaker 1: quite skeptical about that. I mean, I think a dollar 379 00:17:58,600 --> 00:18:04,159 Speaker 1: per week doesn't eve much room for that company to Yeah, yeah, exactly, 380 00:18:04,160 --> 00:18:06,280 Speaker 1: I mean I pay a bit more, that's for sure. 381 00:18:06,880 --> 00:18:09,880 Speaker 1: It doesn't give them much room to cover their costs 382 00:18:10,200 --> 00:18:14,000 Speaker 1: and make any kind of margin. And I do think 383 00:18:14,600 --> 00:18:16,520 Speaker 1: one of the things, and I think if I was 384 00:18:16,560 --> 00:18:20,199 Speaker 1: a incombon utility, I'd certainly be thinking this justifiably, is 385 00:18:20,240 --> 00:18:22,240 Speaker 1: that it's all well and good for these companies when 386 00:18:22,240 --> 00:18:25,480 Speaker 1: they're new. They're very small, they don't have kind of 387 00:18:25,520 --> 00:18:29,320 Speaker 1: the significant overheads that the incumbents are dealing with. And 388 00:18:29,359 --> 00:18:31,800 Speaker 1: I think it's, you know, a big open question will 389 00:18:31,880 --> 00:18:33,800 Speaker 1: any of these companies be able to kind of work 390 00:18:33,800 --> 00:18:36,680 Speaker 1: in the way that they currently are once they scale 391 00:18:36,680 --> 00:18:39,639 Speaker 1: and get to hundreds of thousands, not millions of customers? 392 00:18:39,840 --> 00:18:41,480 Speaker 1: Are they Are they still going to be able to 393 00:18:41,520 --> 00:18:44,399 Speaker 1: have these really low prices that they're kind of offering 394 00:18:44,400 --> 00:18:47,160 Speaker 1: for their service once they've got all of the difficult 395 00:18:47,240 --> 00:18:50,400 Speaker 1: costs of doing business that a large utility currently has. 396 00:18:50,520 --> 00:18:54,120 Speaker 1: It sounds like movie pass. Yeah, yeah, I'm well away. 397 00:18:53,760 --> 00:18:57,320 Speaker 1: They they've priced There's movie subscription way too low, got 398 00:18:57,359 --> 00:19:00,720 Speaker 1: millions of subscribers in two days, and then they couldn't 399 00:19:00,720 --> 00:19:04,679 Speaker 1: handle it. Right, it was unprofitable at that price point. Yeah, exactly. So, 400 00:19:04,760 --> 00:19:07,640 Speaker 1: I mean, you know, I don't know, we don't know 401 00:19:07,640 --> 00:19:11,440 Speaker 1: know that the financial details of these companies. That's it's 402 00:19:11,520 --> 00:19:14,439 Speaker 1: it's it's too early. But a dollar a week seems 403 00:19:15,040 --> 00:19:17,399 Speaker 1: kind of hard to imagine that that it's going to 404 00:19:17,400 --> 00:19:21,159 Speaker 1: be particularly profitable dollar per week per customer. It's not. 405 00:19:21,200 --> 00:19:25,159 Speaker 1: It's not much money. But I mean generally electricity retail 406 00:19:25,240 --> 00:19:28,959 Speaker 1: in competitive markets is often quite a low margin business. Anyway, 407 00:19:29,160 --> 00:19:32,080 Speaker 1: can you explain what all of that overhead is, because 408 00:19:32,119 --> 00:19:35,199 Speaker 1: it's counter to my understanding of economics and that if 409 00:19:35,240 --> 00:19:38,400 Speaker 1: you're small, every single unit costs a lot to make, 410 00:19:38,400 --> 00:19:42,280 Speaker 1: whereas if you're big, theoretically you're capitalizing on the economies 411 00:19:42,280 --> 00:19:44,920 Speaker 1: of scale. Yeah. So I think there's two parts. So one, 412 00:19:45,040 --> 00:19:47,480 Speaker 1: I think, and this will change a lot depending on 413 00:19:47,480 --> 00:19:50,040 Speaker 1: the market, But I think there are certain regulatory obligations 414 00:19:50,080 --> 00:19:51,760 Speaker 1: that you kind of only take on once you get 415 00:19:51,760 --> 00:19:54,120 Speaker 1: to a certain size. But I think it's more kind 416 00:19:54,160 --> 00:20:00,000 Speaker 1: of around like the billing systems, staff pensions from legacy employee. 417 00:20:00,080 --> 00:20:01,960 Speaker 1: You know, there's all all of these kind of things. 418 00:20:02,600 --> 00:20:04,960 Speaker 1: So I guess the counter arguments what I've said about 419 00:20:04,960 --> 00:20:07,400 Speaker 1: can these companies be profitable, they would all say, well, 420 00:20:07,440 --> 00:20:10,400 Speaker 1: we're starting from scratch, we don't have any of that 421 00:20:10,520 --> 00:20:14,280 Speaker 1: those legacy issues. We're kind of I guess digital native 422 00:20:14,320 --> 00:20:18,359 Speaker 1: companies who have built this entire service on a modern 423 00:20:18,560 --> 00:20:22,320 Speaker 1: customer platform. We don't have that. We have all of 424 00:20:22,320 --> 00:20:25,920 Speaker 1: those kind of legacy issues and old software that we're using, 425 00:20:25,920 --> 00:20:29,240 Speaker 1: old customer management systems, and it's all much newer and 426 00:20:29,400 --> 00:20:31,760 Speaker 1: kind of has lower cost of doing business. So as 427 00:20:31,800 --> 00:20:34,159 Speaker 1: we scale, yeah, we'll get those economies of scale you 428 00:20:34,200 --> 00:20:37,320 Speaker 1: alluded to, and we won't be incurring these kind of 429 00:20:37,400 --> 00:20:41,280 Speaker 1: challenging older costs that are competitors bother that the incumbents to. 430 00:20:41,560 --> 00:20:43,520 Speaker 1: I was in a WEE work a few weeks ago, 431 00:20:43,720 --> 00:20:46,399 Speaker 1: just sitting there doing some stuff, and I heard a 432 00:20:46,400 --> 00:20:48,240 Speaker 1: guy at the table next to me, and he was 433 00:20:48,320 --> 00:20:52,840 Speaker 1: clearly a electric superviser um intensively to start up. I 434 00:20:52,880 --> 00:20:54,960 Speaker 1: don't know what which one, but you know, maybe these 435 00:20:55,000 --> 00:20:56,960 Speaker 1: these people are just are pretty out of we works. Yeah, 436 00:20:57,240 --> 00:20:58,720 Speaker 1: I mean that was kind of what was fun about 437 00:20:58,760 --> 00:21:02,080 Speaker 1: looking at this is I think obviously as a business, 438 00:21:02,119 --> 00:21:04,439 Speaker 1: we're looking at many of the changes that are happening 439 00:21:04,560 --> 00:21:07,440 Speaker 1: in the energy sector, and there's multiple different areas where 440 00:21:07,440 --> 00:21:09,280 Speaker 1: that's occurring. But it's kind of like the first time 441 00:21:09,320 --> 00:21:12,920 Speaker 1: really that you see basically startups coming to the electricity 442 00:21:13,040 --> 00:21:16,160 Speaker 1: what is has traditionally been viewed as a very boring area. 443 00:21:16,520 --> 00:21:19,480 Speaker 1: And I think that is part of the fact that 444 00:21:19,560 --> 00:21:21,840 Speaker 1: you know, there is an energy transition underway in a 445 00:21:21,880 --> 00:21:23,760 Speaker 1: number of countries, there's a lot of changes happening, and 446 00:21:23,800 --> 00:21:26,080 Speaker 1: so there's all these things being shaken up, and so 447 00:21:26,359 --> 00:21:29,160 Speaker 1: you'd expect to see kind of new new entrants coming 448 00:21:29,200 --> 00:21:31,880 Speaker 1: to the market, but I also think it's a lot 449 00:21:31,960 --> 00:21:33,880 Speaker 1: to do. I think we're seeing that in a number 450 00:21:33,880 --> 00:21:36,280 Speaker 1: of areas. It's like there's in the UK, for there's 451 00:21:36,280 --> 00:21:38,480 Speaker 1: a number of new banks, right like everyone. I mean, 452 00:21:38,520 --> 00:21:39,879 Speaker 1: I now live in the U S and this is 453 00:21:39,960 --> 00:21:42,119 Speaker 1: not really occurring in the US, but all of my 454 00:21:42,119 --> 00:21:45,960 Speaker 1: friends in the UK are using monzo um little or 455 00:21:45,960 --> 00:21:48,679 Speaker 1: whatever the case. You know, that's that's a new thing 456 00:21:48,720 --> 00:21:52,280 Speaker 1: as well. And I think that's happening in multiple different 457 00:21:52,400 --> 00:21:55,080 Speaker 1: sectors and basically exactly the same thing is occurring in 458 00:21:55,240 --> 00:21:58,600 Speaker 1: the electricity market. Is there a company that you feel 459 00:21:59,280 --> 00:22:02,560 Speaker 1: is pulling out and lead in recent terms of innovation 460 00:22:02,640 --> 00:22:06,160 Speaker 1: and brand reputation, Well, one of the most interesting companies, 461 00:22:06,160 --> 00:22:08,240 Speaker 1: and actually the kind of one they haven't talked about 462 00:22:08,520 --> 00:22:12,200 Speaker 1: at all is there's UM and they have a completely 463 00:22:12,200 --> 00:22:15,880 Speaker 1: different model is one called Arcadia Power UM and they're 464 00:22:15,880 --> 00:22:19,760 Speaker 1: in the US and they essentially act as a middleman 465 00:22:20,160 --> 00:22:24,119 Speaker 1: rather than an electricity supplier. And what we thought was 466 00:22:24,119 --> 00:22:27,720 Speaker 1: particularly interesting about their model is that all of the 467 00:22:27,760 --> 00:22:32,360 Speaker 1: other companies were looking at they're just operating in competitive 468 00:22:32,560 --> 00:22:36,240 Speaker 1: markets where you can choose your electricity supplier, whereas Arcadia 469 00:22:36,240 --> 00:22:38,560 Speaker 1: Power does that, but it also operates in kind of 470 00:22:38,600 --> 00:22:42,359 Speaker 1: the regulated vertically integrated US states where you can't do that, 471 00:22:42,840 --> 00:22:45,359 Speaker 1: and essentially that so they have two models basically defending 472 00:22:45,400 --> 00:22:47,639 Speaker 1: on where they are. What they do in kind of 473 00:22:47,640 --> 00:22:51,600 Speaker 1: the competitive places is they basically help you automatically switch 474 00:22:51,760 --> 00:22:54,719 Speaker 1: onto the lowest kind of offering that's in the market 475 00:22:54,880 --> 00:22:57,960 Speaker 1: and manage the billing for you. In the regulator markets 476 00:22:57,960 --> 00:23:01,120 Speaker 1: where you can't switch, they still do up billing management 477 00:23:01,200 --> 00:23:02,919 Speaker 1: for you, and so they kind of act as an 478 00:23:02,920 --> 00:23:06,680 Speaker 1: intermediary between you and the utility. And I think that's 479 00:23:06,720 --> 00:23:10,199 Speaker 1: really interesting because it unlocks a lot of potential. So firstly, 480 00:23:10,240 --> 00:23:13,119 Speaker 1: they are now acquiring information about you about how you 481 00:23:13,200 --> 00:23:15,440 Speaker 1: use energy and things like that, so that's a great 482 00:23:15,440 --> 00:23:17,480 Speaker 1: position for them to be in. But they can start 483 00:23:17,520 --> 00:23:20,640 Speaker 1: offering you technologies. Maybe they've noticed from your energy use 484 00:23:20,680 --> 00:23:23,040 Speaker 1: that are particular that that you would benefit from a 485 00:23:23,119 --> 00:23:25,880 Speaker 1: rooftop solar system, so they can kind of they could 486 00:23:25,920 --> 00:23:28,440 Speaker 1: sell that to you and potentially do on bill financing 487 00:23:28,440 --> 00:23:32,000 Speaker 1: with the payments you're doing for your electricity, or they 488 00:23:32,040 --> 00:23:33,960 Speaker 1: could help connect you with a supply and so there's 489 00:23:34,040 --> 00:23:35,720 Speaker 1: kind of a lot of potential like that they could 490 00:23:35,720 --> 00:23:38,520 Speaker 1: even start doing. You know, they could offer you a morse, 491 00:23:38,760 --> 00:23:42,200 Speaker 1: interesting and nuanced electricity tariff than the one your utility 492 00:23:42,280 --> 00:23:45,200 Speaker 1: is actually offering, and they could still pay the utility 493 00:23:45,200 --> 00:23:47,040 Speaker 1: in the way that the utility is charging, but then 494 00:23:47,080 --> 00:23:49,000 Speaker 1: you could pay them in a different way, so they 495 00:23:49,000 --> 00:23:51,080 Speaker 1: could offer you a flat fee. What they could do 496 00:23:51,119 --> 00:23:53,240 Speaker 1: the flat fee model even though you're not actually on one, 497 00:23:53,240 --> 00:23:55,720 Speaker 1: so they can. They're kind of in quite a unique 498 00:23:55,720 --> 00:23:58,600 Speaker 1: position to try a lot of different things, and they're 499 00:23:58,680 --> 00:24:01,879 Speaker 1: essentially bringing this kind of innovation that we're seeing around 500 00:24:01,880 --> 00:24:04,600 Speaker 1: that the retail model two markets where there is absolutely 501 00:24:04,800 --> 00:24:07,280 Speaker 1: innovation in the retail models that's quite fun. Last, and 502 00:24:07,359 --> 00:24:10,920 Speaker 1: not least, what is coming up in your research pipeline sure. 503 00:24:11,040 --> 00:24:13,800 Speaker 1: So the Decentrized Energy team, which is the n F 504 00:24:13,880 --> 00:24:16,320 Speaker 1: team that did this work, covers a lot of different topics, 505 00:24:16,320 --> 00:24:19,080 Speaker 1: so it's quite varied, which makes it fun for us. 506 00:24:19,160 --> 00:24:21,280 Speaker 1: But there's kind of three main areas that we're working on. 507 00:24:21,280 --> 00:24:23,880 Speaker 1: So one is kind of continuing this stuff around new 508 00:24:23,920 --> 00:24:26,239 Speaker 1: business models, and one of the big focuses for US 509 00:24:26,520 --> 00:24:30,560 Speaker 1: is looking at the profitability of kind of energy services 510 00:24:30,560 --> 00:24:32,800 Speaker 1: for commercial industrial customers. So that's kind of piece of 511 00:24:32,800 --> 00:24:35,520 Speaker 1: workwork getting underway at the moment. The other part is 512 00:24:35,560 --> 00:24:39,080 Speaker 1: around virtual power plants. We're currently building essentially a virtual 513 00:24:39,119 --> 00:24:41,840 Speaker 1: power plant dispatch model to really look at the economics 514 00:24:41,840 --> 00:24:43,840 Speaker 1: of a virtual power plant, so you know, if you're 515 00:24:43,840 --> 00:24:46,119 Speaker 1: aggregating a whole load of batteries or electric vehicles in 516 00:24:46,160 --> 00:24:48,800 Speaker 1: a certain market, what would the kind of financial profile 517 00:24:48,840 --> 00:24:51,359 Speaker 1: of that look like. And then the third pieces around 518 00:24:51,400 --> 00:24:54,760 Speaker 1: the grid and what does it mean for the grid 519 00:24:54,920 --> 00:24:57,600 Speaker 1: in a world with lots of distributed energy both you know, 520 00:24:57,640 --> 00:24:59,639 Speaker 1: what does that mean for the technology and what does 521 00:24:59,680 --> 00:25:03,399 Speaker 1: that mean investment? And we're caren any doing some analysis 522 00:25:03,400 --> 00:25:05,520 Speaker 1: of kind of the last twenty five years of US 523 00:25:05,640 --> 00:25:08,680 Speaker 1: transmission distribution investment and you know, trying to do a 524 00:25:08,720 --> 00:25:12,040 Speaker 1: very detailed view on what are the fundamental factors that 525 00:25:12,119 --> 00:25:14,720 Speaker 1: determine how much investment there is, and that will be 526 00:25:14,720 --> 00:25:18,280 Speaker 1: the first step towards having an a forward looking view. James, 527 00:25:18,359 --> 00:25:20,280 Speaker 1: thank you so much for joining us today. Yeah, thank 528 00:25:20,280 --> 00:25:23,639 Speaker 1: you very much for having me. Bloomberg an e F 529 00:25:23,760 --> 00:25:26,680 Speaker 1: is a service provided by Bloomberg Finance LP and its affiliates. 530 00:25:26,680 --> 00:25:28,919 Speaker 1: This recording does not constitute, nor it should it be 531 00:25:28,960 --> 00:25:33,080 Speaker 1: construed as investment advice, investment recommendations, or a recommendation as 532 00:25:33,119 --> 00:25:35,920 Speaker 1: to an investment or other strategy. Bloomberguin e F should 533 00:25:35,920 --> 00:25:38,520 Speaker 1: not be considered as information sufficient upon which to base 534 00:25:38,560 --> 00:25:42,080 Speaker 1: an investment decision. 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