Recommended
More Related Content
Similar to We need to cut fixed-rate contracts from the picture
Similar to We need to cut fixed-rate contracts from the picture (20)
Recently uploaded
Recently uploaded (20)
We need to cut fixed-rate contracts from the picture
- 1. Where there’s a will, there’s a way April 2018
- 2. Introducing Flow Power A wholesale power company making electricity better for business.
- 3. Not your average retailer 9 Years of selling wholesale power to businesses 30 Percent cuts to energy costs for customers compared to fixed rates45 95 Percent customer retention rate
- 4. Commercial in Confidence 4 1. The story so far 2. The opportunity 3. The model Today’s presentation
- 5. Back in the day NEM SupplyDemand
- 7. They hedges their bets Gentailers NEM
- 8. They hedged their bets Gentailers NEM $$$$
- 9. The light Customers are pushing for more
- 10. Signals are there Q1 VIC spot average 11.6c/kWh Q1 VIC ASX Futures is 14.3c/kWh
- 11. New opportunities for signals
- 12. Technology is bringing it to the customers
- 13. The model We’ve all got to get on the same page
- 15. 15 Your business Policy Buy hedging contracts Renewable Corporate PPAs Buy on the spot market Automation and control Behind the meter
- 16. There’s plenty more bright ideas where those came from
- 17. Seriously? Anyone looking for a job? careers@flowpower.com.au
Editor's Notes
- Back in the day, the NEM was set up to balance Demand and Supply. Ownership was vertically integrated and the government owned all the assets. When demand increased the dispatchable power portfolio would ramp up and vise versa. They would power down when demand wasn’t as high. It was designed to connect the demand and supply. It was simple but inefficient.
- Introduction of de-regulation where government let retailers in. It might not look like it but that’s where I started back with an energy management business. Retailers started entering the market to create a customer interface. Enter fixed rate contracts. (click) The retailers inherited a fixed rate contract model. Maybe this was driven by customers Cultural or maybe it was to drive profits.
- Then those retailers realised that there was a way to not have to deal with the mess of disrupting their customers BUY THE GENERATOR! (click) Under this model, there is no interest for retailers to benefit from connecting customers to signals. (click x2)
- When there was increasing volatility many retailers bought into the generation market. Enter the gentailers. So now… when demand goes up and supply is scarce – the power price goes up BUT That means the generator is earning more. In fact it’s the customers who pay for the scarcity of supply when the gentailers have provided them with no mechanism to avoid high prices. (click) So after all that gloom and doom… and considering I’ve already mentioned that we are a retailer. Let’s go to the light at the end of the tunnel
- The Victorian spot average is 23% less over Q1 of this year This is with out controlling load.
- With renewables, the signals are more stronger. Whether it’s through a PPA with a wind farm like we’ve been doing with Ararat or it’s with an onsite solar system, the opportunities for those that are willing is even greater.
- We need to encourage the right behaviours by using energy management to connect customers to market signals. The next step in the story is to focus on the customer, just like the retailers did when they became Gen-tailers. (click) Everyone in this room WILL play a role in making the solution customer centric
- Next steps We all need to get on the same page. Good enough isn't good enough, we need to evolve and improve the model
- First, we need to remove fixed rate contracts from the picture By connecting customers with Demand Response, they will be able to respond and interact with the true signals of the market
- This is the power strategy of the future Businesses can be connected to low cost power through renewable PPA’s, hedging contracts and buying on the spot market All whilst benefiting from on site solar panels and other behind the meter solutions