The Future of Energy Retail with Ryan Wavish

We'd like to begin this podcast by acknowledging the traditional owners of the land on which we meet and broadcast today. We pay our respects to elders past, present and emerging. And in particular, I'd like to pay my respects to the people of the Yamatji Nation where I spent the formative years of my life and who are instrumental in shaping the person I am today. The biggest challenge that we have with customers is just gaining trust. Electricity retailers aren't the most trusted entities out there and that's happened over a long period of time. So we're going to turn around and sort of say, trust us, give us the keys to your battery or manage your challenging it. That's a big, that's a big ask. I'm Dr Greg Trainer and this is the Network Edge, wide for energy podcast. On today's show, we have Ryan Wavish, the GM of Innovation at ONG, to discuss ONG's role as a global energy leader. How innovation is shaping its operations in Australia and the way it's managing the energy transition across different areas of the business. Welcome, Ryan. Thanks, Greg. Great to be here. We usually kick off with a bit of a light question, but what's the best thing about working with ONG being such a big company with a long history and a big global presence? Yeah, well, I think you've sort of hit it on the head there. It is tapping into that global business and understanding what's going on across energy markets around the world, particularly in Europe. And to be honest, it's great to visit headquarters as well. It's a beautiful part of the world. So that's nice too. But being part of a global sort of movement and a global business is really good to provide more perspective. I guess from an energy perspective, too, there's not too many things they haven't tried, right? So you can tap into that, you know, a whole bunch of different jurisdictions that they were working. That's right. There's research centers and groups that are doing a whole bunch of different and really interesting things just across the spectrum from from AI to, you know, the most sort of advanced consumer electronics into hydrogen and all those things. So there's a real break of activity going on. And we'll probably get into some of the specifics as we go along just in terms of how you engage with them. But just to go back a bit, when and how did you first get involved in the renewable energy scene? Was it by design or by accident? No, it was, it was quite a zone, but it took a fair amount of time. So I did a bit of work in the energy sector as a grad way back when around the early days of carbon trading. Nothing until about 2009 and the failure of the carbon-hugging summit in Denmark that really sort of spend my interest in the energy sector again and a desire to sort of get back into energy and sort of work in that space. At that stage, I was in finance doing consulting and I eventually made my way back into the energy side of things about 2011 when I started working a true energy, which became energy Australia. But it wasn't until I joined Marksman Hill in 2013 that working in the sector really started to focus on renewables and the energy transition. But it was intentional, but it took a few years to get where I wanted to be. Yeah, and I was going to ask you to touch on Marksman Hill because you were CEO of Marksman Hill for a while, which would be well known in industry as a boutique advisory and consulting company. What's some of the highlights and some of the projects, successes that you were involved in and witnessed over that period because there was a pretty early and formidable period in the energy transition, wasn't it? Yeah, I mean, Marksman Hill is a great boutique, so energy and water consultancy. We sort of like to say punched above its weight in an sector. I was a fan of our Neil Gibbs in 2004 and our salt to our utilities of consultancy from the UK in 2019. And sort of one of the highlights for me in my time there was probably our work with arena, the Australian Renewable Energy Agency. In particular, we had a role supporting their A lab initiative, which was a really exciting collaborative industry wide initiative where we brought together experts from across the sector. In through a room for a couple of days and really work to co-design trials and initiatives, the arena could then fund to try and move the sector forward and accelerate the energy transition. As a person in the industry, it was great to meet so many of the people across the sector and discuss some really interesting ideas, get some projects off the ground and see those initiatives sort of help and support the support transition. So that was a really sort of pivotal piece of work for me and from Archman Hill to sort of broaden our reach within the sector. And looking back on it now, do you see many have got through the funnel from that period and into the marketplace? Yeah, there's a few of the early sort of virtual power plant trials, some of the early early sort of software players in that in that area, on low working industrial sort of decarbonisation as well, went on some of the early ideas around redesigning the market, some of the early community battery sort of concepts. So there's a few things that have come on and various businesses have grown and been brought out, we're still dealing with a couple of them. And obviously the early work on virtual power plants that I was also supporting in my role at March, when Hill with NG when they were they were required then back when I simply energy is still continuing this time and my new role. So there's a lot of work that went on in that by reenering those days and under the alert that is sort of lending out now. Yeah, and it still exists was a parent place for something else, the alert. I think it's transformed into another sort of form. I think there's still some collaborative work and sessions that I run under that banner. And so it's actually sort of ran its course in terms of the work that was doing across the sector and sort of fulfilled its largely its initial initial objectives. Yeah, and this all probably led pretty well to your role as GM innovation at on G. What's it actually in tail? What's the mission and drive of the role given on the one hand it's aligned to a sizeable retail business in Australia. And on the other hand, there's the the generation side of it, which kind of compliments it. Can you just unpack that for us because it's probably a pretty meaty role with a bunch of remits. Yeah, I mean, actually a pretty small team for the work that we do. Some of the other retailers have quite significant teams. We're set up as really an incubator for ideas and business models and new concepts that we can then test and trial and then transition to the broader business. But our our objective is really to try and build the business model of the future. We're testing and trialling new products and concepts that we think are going to be part of that business model of the future for energy retailer and then transferring into the broader business. And where we think the retail business model is extending to is beyond the sort of commodity energy plans and into more support for customers as they sort of electrify their homes and building off those electrification assets. Getting access to what we call sort of customer flexibility, which is sort of ability for customers and their technologies to shift or change load or generation output and monetizing that flexibility for the customer sharing those benefits for the customer and sort of building a significant source of flexibility to support our renewable assets and the larger scale energy transition. So we're working towards a five and a mega watt sort of virtual power plant by 2030 as part of that business model of the future for for the retailer. And is that all residential so that include commercial industrial as well. Yeah, no, that's just our residential ambition. Obviously there there'll be more commercial industrial flexibility on top of that, but my remit is is specifically relating to the residential customer base, but it's obviously made up of a whole bunch of different sort of asset types, not just tone batteries, but hot water systems and flexible solar, yeah, even flexibility or all those stuff, which is going to see huge growth in the next five years. Yeah, and when you say working with them on flexibility, do you have a position on trying to control assets and devices in the home, was it a collaborative approach with the customer in terms of how that's orchestrated and you need. There's sort of a range of ways in which customers can get involved. We have products which I guess you could term as behavioral demand response, where we send signals price signals to customers and they respond. We literally send them a text message and ask them to reduce their load and then they get rewarded through guild credits for doing so so they're sort of fairly basic approaches to some products, but in the other hand, we have retail electricity supply contracts with curts. customers which allow us to remotely and automatically manage the battery system of a customer. Yeah. We thin certain limits per year of sort of usage to trade on Ansible Services and AG market. So the customer really doesn't see that, isn't really involved in it, but I do get paid regularly, repays a regular fixed payment to the customer to be able to access their batteries. Yeah. In that way. So there's different ways in which customers are engaged, some are more active others, more passive, but I think that just reflects the different customer types out there and what they're happy and willing to engage in. And what would you say the feedback is a lot because I remember the early days, people used to not put up the argument that one, they didn't want their assets controlled and two, they thought they would be caught off guard in terms of times that you're trying to control or leverage assets. What's the feedback like now? Yeah. I think the biggest challenge that we have with customers is just gaining trust. So we're in to turn around and sort of say, trust us, give us the keys to your battery or manage your charging. The onus is on us to build that trust provide information and data to customers to make sure that they understand what's happening and why and to link that with real values so that they can see the benefits in managed, managed controls of their devices. So, it's a journey that customers are going on. It's fair to say that we're making progress and more and more customers are engaged and interested in willing to participate. But the onus is on us to support that. So just taking that up a level, how does that come out in terms of cross country collaboration with different parts of the on-gee business, whether it be in Asia, Europe, United States, wherever they might be? How do you guys kind of work together and what are some of the impacts, particularly from an innovation standpoint? And she has six retail businesses around the world. We're about 22 million customers all up. So, mainly in Europe, so we've got France, Belgium, Italy, the Netherlands, Romania and Australia. And we have a research and innovation center like a dedicated lab effectively in Belgium. We're all sort of doing similar work, particularly around this concept of customer flexibility and looking for ways to access monetized and share that the value of that flexibility with our customer base and support to decide a lot of their bills and control their costs and accelerate the energy transition. So we're all sort of pretty much aligned on that. We're just different in sort of different assets. So Australia is very advanced in our work with solar and battery, obviously. So Australia is well ahead of the curve on rooftop solar uptake and residential battery uptake. So a lot of the lessons we learn with our trials and products in that space we export, I guess, to those other NG units in Europe. But likewise, they're more advanced than us on EVs. There's a lot higher penetration of EVs in Europe than there is here. So their products and trials are much more advanced over there. So we learn from that, they do a lot of testing of of platforms and products over there and then we can sort of bring them here when they're ready and when the market is sort of sufficiently ready here. We also share like system and market insights access to global sort of deals and scale for for certain software platforms and things like that. So it's a real benefit in having that global exposure and a lot of knowledge sharing goes on where we sort of meet up probably once a year as a collective to share those that progress and build relationships. And how consistent is the theme and the urgency on the energy transition across the companies because I imagine they're all quite different right in terms of culture, markets, history, all that kind of stuff. Yeah, NG has a global purpose to accelerate the energy transition and it's striving to be sort of the best energy transition utility by 2030. And it's organized by global business units. So we have global lines of business like renewables and flexible power, supply and energy management networks, local energy infrastructure. So we do have a lot of consistency along those global business lines. But the local geographies have their own sort of strategies to implement the objectives and benefit from the sort of integrated business model in a local market type thing. So we'll have our own Australian strategy and that's relevant to the Australian markets and Australian conditions. But we all do report up through into comparison to along our global business lines to ensure sort of consistency. But a really strong message right? A really strong purpose. Absolutely. Yeah. And that's one of the things I really like about working for NG are pretty mission sort of driven individual and their mission is really clear. Our purpose is really clear and accelerating energy transition. So and it's really consistent with mine. So and it flows through everything everything we do and it's sort of great to be a part of that. And you kind of touched on it, but what role does technology play in setting a platform for executing on that energy transition, that big energy transition purpose? Do you try and minimise it as much as possible across the different businesses and geographies? Yeah, I think they try. It's sometimes hard. Yeah. Technology plays a huge role in an NGE talent business and I think of it into two parts. Firstly, you've got sort of your foundational business systems, like your billing systems and CRM systems. And I think with those, you're seeing now the realisation that some of the more traditional systems of and legacy systems have their limitations, particularly in supporting new energy products. So you're seeing the emergence of platforms like Kraken and and colluser to support to better the sport product innovation. And I think you know, you're aware of this and certainly we're looking to try and standardise our approach to those foundational systems. But then you've got like the sort of flexibility platforms, the sort of newer and emerging VPP software systems. It's a pretty nice industry. A lot of the platforms are being developed within their jurisdictions with the local use cases in mind. In Australia, we've seen a lot of this with a bunch of Australian startups trying to break through, but they're specifically sort of tailored to the deflexibility available in the Australian market. It's hard to get financial backing and there's small markets. So it's challenging to have sort of global platforms for those things. But we've just announced a new partnership with IntelliHub and they recently bought out Evagen, which is a great Australian flexibility startup story. So we're working on the Evagen platform in Australia and we have sort of made introductions to our counterparts in Europe for Evagen. So you know, there's options there, but it's a bit harder with those those flexibly money platforms because the needs of the different markets are so different at this stage. You've touched on a little bit, but can you talk to us about the onji philosophy and strategy around retail markets and consumers in face of the energy transition? So I suspect they're looking in working with them differently to what they were five years ago. What's that look like? Yeah, absolutely. I mean, I think most retailers acknowledge that the customers recognize and need for the energy transition, but there's sort of a general concern that it's like confusing, difficult to understand, particularly in the current political environment, where it's so many different views and perspectives out there about what to do and the way that it's costly as well. And what we know is that their number one priority is cost, but all want the bills to be lower. So, Angie's sort of brand proposition in the Australian market is value and sustainability. So our position is that it's possible, you know, it's possible to have value and sustainability. And that's sort of how we're positioning the Angie brand and that's the sort of vision that we have to deliver on. So what does that mean? We want to have really simple, simple products that show really compelling value proposition to the customers so that they're seeing those energy savings and bill savings, but they're also good for the planet and they can get that sense that they're doing the right thing by the environment. And that's a shift, I guess, from the simply energy brand, which I think was probably more focused on being low cost challenger brand. Angie is looking to bring that sustainability and that environmental benefit into the equation to build on the sort of rigth as we had as a good value energy retailer. And I guess that's also backed by their investments on the generation side of as well, right? - That's right. I mean, Angie was the first company in Australia to get out of coal. We did that a long time ago, and we've now sort of knocked down the old coal-fired power stations, replaced them with big batteries, and we've got a really big ambition for renewables in Australia, so we developed a couple of wind farms already where we're building a solar farm at the moment, and we've got lots more development opportunities in the pipeline that we're working on. So yeah, there's huge ambition for Angie in Australia. It's been identified as one of the few target markets for renewables growth in the Angie Geography, and we're working to support that as a retail business. - And just jumping into one of the real specifics, one that I'm familiar with, the Angie Arena-backed VPBX trial, which has now been operational for a while. What's it like now? Size, coverage, engagement with the networks and the consumers. How's that morphed over the last couple of years? - Yeah, it's been a great experience for Angie. The VPBX trial started in about 2017, when we got Arena funding, and it was about the second VPB trial in Australia. The initial objectives was to get about 1200 home batteries, and they were heavily subsidised with Arena funding. The trial finished in about 2022, really, that those subsidies rolled off, and we changed it into non-substitised VPB offers. And we've grown now to about 3,000 customers across, and we're going out from South Australia to being now across New South Wales, Queensland, and Victoria. We've successfully accessed all the FCAS markets in South Australia, New South Wales and Victoria. Sorry, VPB's been trading in all those markets over the last couple of years. And now we've extended the virtual power plants with concept from batteries into hot water systems, community batteries, flexible solar. And so the whole fleet is over 50 megawatts so far. So it's been a really good, great story. Obviously, we've got a long way to go. We want to get to 500 megawatts by the end of the decade, but it's been a really good success story for ENGY. The other part of that trial was this collaboration with the networks through the DEX platform, which was built by GreenSync. That's now being bought out by TeleHub, who we partner with. And that DEX platform is now supporting solar flexibility or solar-cautuminin in a number of jurisdictions, supporting the networks in their management of excess solar. So that's still around. And then the concept of this central hub connecting sort of retailers and networks and markets and assets, or consumer assets, is still being worked on through projects like Project Edge and the CR Data Exchange and Smart Connect Initiative. So all those concepts are still being built on as well as the actual VPB asset. So that part of the technology hasn't been totally correct yet, right? No, no. And it was way ahead of its time in hindsight. First to me, during it back in 2018 and things like that, but it is still being worked on. And I think it is still a really worthwhile objective as a particular as more EVs and batteries come onto the market. Yeah, maybe a company secret, but you must have learnt a lot from customers over that period in how they respond to a VPB and how changes their behaviours or not has happened. Yeah, absolutely. I mean, we learnt like regardless of the sort of fascination with the technology and customers are still driven by price and benefits. So it's a really price sensitive cohort. And they appreciate their benefits. They stay around while the benefits are there, but they're always on the lookout as well for better offers. And there's a lot of competition in the VPB space. So the customer sort of sentiment is pretty consistent. What's changed a lot is the markets and their relative value for markets. So example, FKs markets were really lucrative there for a couple of years now they've died off and hold some markets. I saw the ones we're chasing now. So there's a lot that goes on behind the scenes as well to get those benefits for customers and a lot of flexibility required. And so when you, you know, turn a form and innovation approach both locally and internationally. How do you inform yourself? Do you look to other industries for that as well? Because I mean, there is a lot of stuff going on in the energy sector, which is fantastic. But do you look for other initiatives, outliers, different industries that can shed light on what you're trying to do? Yeah, I mean, the best source of information is our customers. So we speak to our customers all the time with surveying them, doing focus groups. They're getting direct feedback listening into calls that they have with us about issues or complaints or what they want from their energy plans. So there's a lot we learn from our own customer base. There's a lot we learn from our competitors and what they're doing in this space, the different products that they are developing. We have a team which brings in people from different industries as well. So we bring in people from like the telco industry where it just brought in a new team member from the streaming industry, from FoxTel and Bing. So we learn from those other sort of customer services as well and trying to bring some of those lessons into the energy sector too. So yeah, we try and draw on as many sources of insight as possible. And just when you bring all that back to the market, have we made the markets far too complicated, too complex? This is a good question. Arguably, yes, like in hindsight, the markets we're founded in Australia on this sort of driving belief in the power of competition, but we have a huge geography and a small population. So we've ended up with a really, really complex dynamic of stakeholders with lots of regions, lots of markets, lots of distributors and transmission companies, lots of retailers, lots of generators and lots of rules. And lots of customers. Yeah, but only a small population. And now with the rise of renewable energy, which has sort of zero fuel costs, lots of storage and energy flows both ways and a huge amount of distributed energy resources. It's just so much collaboration that's required now between those parties to get things done. That means that if you've got a massive transition period, getting all those parties in line to do stuff is really difficult. I think we can get there and I think we make great progress. But the complexity does add a lot of challenge in a time or change. Yeah, and we've kind of touched on this question with most people who've had it on the podcast. But is there room or can you say any movement of the kind of a reintroduction of community energy models? Not necessarily. It's like everything else, but to complement where it makes sense, whether it be regions or particular local areas. Yeah, and there's a question here is whether the market goes even more complex and goes down to these local areas where there's local, nodal pricing and a lot more complexity. There's certainly a massive role for consumers to participate in the energy transition. Are they already through solar and batteries and EVs and the products that they engage with at home? I think we need to be careful as to how much more complex and we introduce to the system. And whether that just adds to the cost of integrating all those assets successfully. For example, one of the things that we struggle with is the cost of integrating all the different devices, to the one-guarante types and brands into our virtual power plant to be able to access the flexibility, get the value, and share that with customers. So ways that we can simplify that through shared infrastructure and sensual exchanges will just help us access that huge resource a lot more efficiently so that it's not gone to waste and we don't have to build separate large-scale batteries or other flexibility assets. We can use the assets that customers are willing or sort of investing in to support the transition as well. And when you bring back all that complexity back to the customer, is it fair to say to question right? Is it fair to say that this is going to bring it back to a mobile device? Most people would want to very easily and simply manage their energy for our clients so they can, and other things like streaming or banking or whatever through their mobile device. So you've got to respond to that and work around how that is made to happen. Yeah, absolutely. I mean, the app is the key information source for customers and particularly with these more sophisticated products. It's really important to provide them reliable, detailed information to gain their trust and to enable them to sort of set and forget. So to speak. So our ambition is to have really simple offers where you can have control over your costs and benefits and relative certainty about what it's going to cost you and what benefits you're going to receive. But you've got access to a whole bunch of information should you need it. And if you want it. So it's there when you want it and it's there when you need it. But. you can ignore it and just let it run in the background, knowing that there's a whole lot of complexity that's being managed on your behalf and your benefit and format and I think the app is the customer app is a key to that conversation with the customers and building their trust. And just what you view on the usage at the moment is that widely used or still developing? Usage of apps to me. Yeah, our app, we've just re-platformed our app with the rebrand and we're seeing really high engagement and uptake of that. The one thing that we need to do with our more sophisticated products is get more visibility on that. So the app is doing the basics for the large amount of large sort of customer cohort but the thing that we're working on now is getting some of our more sophisticated products onto that app. Sorry, so our customers can access it and get the same same level of visibility. Hey, one last question, a bit more of a personal question after we've covered those topics. So thanks very much for that. It's been great. If you were or if you are mentoring someone coming into the energy market, into the industry, what's three bits of advice you'd give them about building a career in energy? Okay, firstly, I'd say, cooking to the transition or the mission to get an understanding of how the energy industry is sort of so important and its transition is so important to addressing climate change and getting to that sort of net zero economy. The second thing would be sort of an appreciation that it's not linear that you don't sort of have this sort of linear pathway from where you are now to the sort of the ultimate job that you just got to take your opportunities as they come and they might be a bit sideways and a bit distant if they're generally in that direction, then that's okay. And you learn so much along the way that it's really beneficial to have that breadth of experience as you go through your opportunities, actually a complex and broad industry. And then I think the third thing would be just to remember that you're an energy customer as well as an industry participant. And so to really tap into your views of a customer experience and what customers want and your experience of just your daily life to appreciate that it is such a small part of a customer's world. And even though we're all absorbed by it, it's only a small part of an individual's thought processes. And so remembering that as you sort of try and work your way through your role in the sector that part, although it's a big thing for us, it's not for energy customers and they don't have all the attention to devote to it. So you've got to make things easy and simple for them. It's as simple as flicking a switch isn't it? That's what they expect to work every time. It's just gotta work. And we know that because we use energy and we pay our bills. We've got to remember that as well as we work through the sector. That's great. Thank you. Thanks very much, Ryan. That's great. Thanks, Greg. Thanks for taking the time, mate. Thanks for listening. You can find more information about this and other episodes in the show notes. Wide for energy is a production of network edge with episodes produced and edited by post-Aboy Media. Make sure to follow or subscribe to stay updated on future episodes. [Music] [BLANK_AUDIO]