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UTILITY Week 21st November 2014

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UtILItY WeeK | 21st - 27th November 2014 | 9 Interview W e need to be constantly on our toes," Guus Weiss explains. The new head of GDF Suez Energy UK's retail business is discussing the demands of the business energy market. But he could just as easily be describing the past six months he has spent at the helm. Weiss le the Dutch arm of GDF Suez earlier this year to take up the challenge of growing the 5-7 per cent share of the UK business in an increas- ingly competitive market, just a few months before the sector-wide referral to the Competition and Markets Authority (CMA). But this is no bad thing – now, more than ever, the UK may be in need of a fresh perspective, he suggests. The perspective from Weiss is clear: the market should be driven by customer-led innovation and guided by regulation that is streamlined and efficient, he tells Utility Week. Although not unduly critical of the UK, he outlines how his experience in mainland Europe and in the business-supply market has shaped his view of the UK's shiing energy landscape, and the work that still needs to be done. "I'm actually really happy to be here," he chuckles, "because this is the first country in the world that opened the market for energy. It's very mature and everything is externalised – even the national grid is in private hands – and this gives a lot of dimension." The business supply market perhaps shows the UK energy sector at its liberalised best. While the domestic market is seen to be dominated by a handful of the "same old suppliers" – all of whom are dogged by accusations of poor customer service – B2B market players need to work hard to offer bespoke supply solutions at a competitive price in order to survive. There is fierce competition. There is a drive for innovation. There is real choice. In many ways it's a regulator's wishlist for everything the domestic market should be – but isn't. "A B2B market lends itself to being competitive," Weiss agrees. "It is very competitive and you see a lot of new entrants, with different business models, which is good because different customers have different needs." So how does GDF Suez compete? "The challenge is to listen very well to what your customer wants... if you do that you can get your quality up but you can also get your costs down," he says. So far, the Leeds-based team has proved nimble enough to "make decisions quickly", and although it is small it benefits from the backing of a European energy giant, Weiss adds. The business focuses on three core offerings that are increasingly interconnected: the traditional sale of gas and electricity; the purchase of renewable energy through power purchase agreements (PPAs); and other "energy services" relating to demand management and sustainability, which Weiss says are becoming "more and more important". An example of just this emerged last month when, in response to demand, the company launched a service enabling customers to track their energy use ahead of tight supply periods expected this winter, Weiss says. The data could help customers minimise transmis- sion network use of system (TNUoS) charges. These charges appear on the electricity bills of business customers each year and are based on average electricity consumption during "triad" periods – the highest three half-hourly periods of peak demand per winter (see box on triad charges, p8). Ultimately, though, businesses make decisions based on the bottom line. And GDF Suez is working just as hard to provide flexible, transparent pricing. "We were the first ones to introduce flexible prod- ucts," Weiss says matter-of-factly. Business suppliers typically offer fixed-price or roll- ing contracts based on the prevailing market rate, but GDF Suez also allows its customers to fix the price they want at a later time, based on the market. "We actually do the same when we buy the PPAs. The sellers want to be secure that they have a good oake for their product but they want to manage their price," Weiss says. Customers also want their prices to be transparent, Weiss adds, so in the past two to three months GDF Suez has started allowing customers to choose their contract rate based on the price shown by any of the main four electronic trading platforms used by the market. The level of flexibility and transparency stands in stark contrast to the UK's domestic retail market, which has remained on the same tariff levels over the past year despite heavy falls on the wholesale power market. The bearish sentiment resulted in multi-year lows and calls "

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