Utility Week

UTILITY Week 17th October 2014

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The International Energy Agency (IEA) has published its Africa Energy Outlook. The IEA says three actions in the energy sector, if accompanied by more general governance reforms, could boost the sub- Saharan economy by 30 per cent in 2040, an extra decade's worth of growth in per-capita incomes. These actions are: • An additional £280 billion in power sector investment, cutting power outages by half and giving universal access to electricity in urban areas. • Deeper regional co-operation and integration, facilitating new large-scale generation and transmission projects and enabling expansion in cross-border trade. • Better management of resources and revenues, adopting robust and transparent processes that allow for more effective use of oil and gas revenues. 6 | 17th - 23rD OctOBer 2014 | UTILITY WEEK People & Opinion Empower the people – and feel the love Customers are not just meter numbers. Treat them properly, and they'll respond. Chief executive's view Ari Sargent, Power Shop W e set out to disrupt our industry and it's sad but true that creating customer engagement is a revo- lution and a disruption for the energy business. We are an industry that was designed and built by engineers, bastardised by economists and muddled by marketers. We con- tinue to operate one of the most complex consumer confusion programmes of all time. First impressions count, so we launched marketing material that was designed to get a reac- tion. We chose to be topical and controversial, we aimed to get a laugh – and sometimes peo- ple didn't like it. The point is, we got a reaction. If there is no reaction, there is no customer engagement. Our ethos was established around giving power to our consumers – literally and meta- phorically. But we also wanted more than that. We set ourselves what might be considered the unrealistic challenge of becom- ing a power company that our customers loved. So we built our business around people. The traditional energy retail model is not built around people. It is built around industry rules and regulations and this is not a good recipe for a positive cus- tomer experience. Love is all about emotion. You won't build love by chuck- ing graphs at customers. You've got to think, not just about what they want from a functional, rational perspective, but also what they want from an emo- tional perspective. That's prob- ably the most neglected part of the electricity customer's experi- ence around the world. So we worked hard to deliver emotional benefits out of a feel- ing of satisfaction and control. Transforming the customer experience into one of control is about taking the massive amounts of data that we have as an industry, turning that into insight and allowing customers to act on it. We've moved from a model where customers get regu- lar demands for payment – you call them bills – to one where they actively log in 64 times a year – more than once a week. Customers actually want to check their balances and trans- act with us because when they log on they can get a positive experience – they can look for a discount. Unlike a traditional retailer, we don't bill our customers once every month or couple of months. Our customers log in and buy packages of power called "power packs" – this gives customers the flexibility to buy when they like and how much they like. In addition, these packages give us the option to customise products for different customer types. We have green products, so our environmentally con- scious customers can buy power packs that have carbon offsets attached. Other products are scaled for consumption – for instance for large families. It is perfectly possible to build a power company that customers love, but you won't do it with the same crappy PC systems you've always had; you won't do it with people who don't care; and you won't do it if you treat your cus- tomers badly. Power Shop is a New Zealand-based energy supplier with 55,000 customers in New Zealand and 25,000 in Australia, a market it launched into less than a year ago. This opinion piece is an abridged version of an address Ari Sargent gave at KPMG's Global Power and Utilities Conference, 7 October. Coal Gas Oil Nuclear Hydro Bioenergy Wind Geothermal Solar PV CSP Other renewables 1% 22% 3% 9% 9% 56% 3% 27% 4% 2% 3% 26% 25% 3% 4% 3% Hot off the Press: Africa Energy Outlook 2012 total generation: 440tWh 2040 total generation: 1,540tWh

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