As the renewable energy transition gathers pace, the way we consume electricity is transforming, and more “decisions are being made by the consumer, not by big corporates.”
In a wide-ranging interview with the SwitchedOn podcast, chief marketing and flexibility officer at Kraken, Devrim Celal, argues that electricity retailers must adapt to this transformation and deliver what consumers need and want.
“Energy retailers that can’t provide what the customer wants, and can’t offer customised products tailored for each consumer, will be competed out of the market,” predicts Celal.
“Unless we build a new system where the consumer has an incentive to participate in helping balance electricity between when it’s abundant and not, then we’re walking into a major storm.”
Kraken is an innovative green energy technology company whose technology underpins everything that Octopus Energy, one of the largest green energy companies in the UK does.
Octopus started as a small British energy supplier in 2016, and today it powers some 6 million homes in the UK, Germany, the US, Japan, Spain, Italy, France and New Zealand with green energy.
In addition to being a green energy retailer, Octopus is unusual in the global energy market in its efforts to make energy simpler for the consumer.
It also sells and leases electric vehicles, invests heavily in renewable energy infrastructure including solar, wind and storage facilities, and even manufactures heat pumps specifically designed for homes.
Celal argues that much of the energy industry fails to ask a fundamental question that is crucial for the energy transition and that is, “what does the consumer really want?”
Consumers of course need and want different things. If a consumer has an electric vehicle, Celal says they’re often interested in cheap range. If they have air conditioning for cooling or a heat pump for heating, they often just want to be comfortable at home. If they’ve bought solar or solar plus a battery, they’re looking for a return on their investment.
“We need to figure out how to give that to consumers in a very transparent and clear way.”
Until recently much of the industry hasn’t believed that is possible. But technology is pushing change.
“When a customer buys an electric vehicle, their relationship with electricity changes because electricity becomes their second largest household bill after their mortgage or rent, and at that point, they become a lot more focused on looking at what’s out there,” Celal says.
But delivering what consumers want will take more than just innovative technology.
It takes trust in the industry that is delivering energy.
The problem globally is consumers don’t trust the energy industry. For over a decade the large public relations firm Edelmans has published what they call their ‘trust parameter’ which ranks the trust between consumers and key industries. The energy industry consistently ranks at the lower end of the scale.
Celal cites an infamous tariff structure used by energy companies in the UK as just one example of why the industry has lost the trust of consumers.
Dubbed ‘tease and squeeze,’ and not only used by the energy industry, companies signed customers up on a favourable electricity tariff for 12 months but at the end of the 12 months “put the customer onto their most expensive tariff and hoped the customer did not realise what happened.”
To regain the trust of consumers, Celal argues electricity must become a well-loved consumer brand – consumers must be given real choices, favourable tariffs, and industry has to treat them well and have their best interests at heart.
“That’s where you start building trust, and once you have that trust, you can go a lot further in engaging them to willingly participate in this energy transition.”
In January 2022 Octopus released a product that it believes does just that, but also maximises the use of green energy, and lessens the need for big network upgrades.
Intelligent Octopus is a customised product that gives EV drivers very cheap charging in return for allowing the company to take control of their charging.
Registered customers are asked what state of charge they would like their cars to have and by when. “Most consumers ask for it to be charged to 80% by 7am and a very large majority of them never change that metric,” Celal says.
Octopus has a 9 to 14 hour window when someone usually gets home to the point where they need their car charged and ready to go.
“That flexibility allows us to move that charging point in time to match it with when we have abundant green electricity, which happens to be the cheapest periods of electricity, and to do that at times when the distribution network, the highways of electricity, are not congested.”
“So suddenly we’re making maximum use of green electricity, and we’re doing it in such a way that we don’t have to go and spend millions of dollars upgrading the networks.”
From just over 800 Tesla drivers who signed up on day one, Intelligent Octopus has now exceeded 200,000 consumers and expanded from electric vehicles to heat pumps, batteries, smart thermostats.
“It continues to grow at a rate of 19% every month with practically no advertising,” Celal maintains. “That is absolute proof that if you give consumers what they ask for, they will actually come in numbers.”
Kraken technology also allows companies like Octopus to provide more personalised service for customer calls. Rather than getting passed from department to department to resolve an enquiry, Kraken uses a ‘universal agent model.’ Any customer service agent who receives a call has to be able to resolve it: “no transfers, no back office, no exception.”
That’s only possible because the technology gives every customer service agent access to all of a customer’s data.
You can hear the full interview with Devrim Celal on the SwitchedOn podcast.
Anne Delaney is the host of the SwitchedOn podcast and our Electrification Editor, She has had a successful career in journalism (the ABC and SBS), as a documentary film maker, and as an artist and sculptor.
