Net Zero Ventures with British Gas

Jon Slowe engages in a compelling conversation with Andrew Middleton, the esteemed Managing Director of British Gas Zero, joined by Nigel Timperley, a respected expert. Jon, Nigel, and Andrew delve into a comprehensive exploration of the myriad opportunities and formidable challenges that energy retailers encounter when collaborating with their valued customers to embark on the transformative journey of decarbonising residential properties.

Episode transcript

[00:00:00.090] – Jon Slowe

Welcome to Talking New Energy, a podcast from LCP Delta. The new energy experts. In the podcast, we'll be exploring how the energy transition is unfolding across Europe through conversations with guests from the leading edge of the transition.

Hello and welcome to the episode. If the energy crisis has a positive, then it's probably that there's never been a better time to help customers to reduce their energy bills and invest in energy efficient products and services. Energy retailers are arguably in a unique position to support customers to do this, but many energy retailers have struggled over the years to develop successful businesses around supporting their customers in this way. And from my perspective, quite a few haven't stepped up as they thought they could to help their customers through the energy crisis. So today I'm very excited to be talking with Andrew Middleton, MD at British Gas Zero, part of Centrica, one of British Gas largest energy retailers. Hello, Andrew.

 

[00:01:10.400] – Andrew Middleton

Hi, nice to be here.

 

[00:01:11.690] – Jon Slowe

Thanks for having me and thanks for joining. Andrew, can you describe in a nutshell what British Gas Zero is and what your role is at British Gas Zero?

 

[00:01:21.820] – Andrew Middleton

Yeah, absolutely. I'll maybe just start with British Gas for any listeners beyond the UK. So, British Gas is one of the UK's leading suppliers of energy and related services. We supply energy to about 7 million homes in the UK. Our engineers are in 3 million homes a year, primarily installing and servicing heating systems. We also have Hive, which helps about 2 million homes reduce their energy consumption and heat and power their homes more efficiently. My role is to lead British Gas Zero. We're a new business unit which has the sole mission to help customers reduce both their energy bills but also their carbon consumption. And our business unit installs, manages, and supports a range of kind of technologies that support that agenda, be that EV charges, heat pumps, solar panels, and smart home technology.

 

[00:02:15.530] – Jon Slowe

Is it all B2C (Business to Customer), Andrew? In terms of residential customers?

 

[00:02:20.100] – Andrew Middleton

No. So, we span both the private sector, but also public sector, where we utilise our PH Jones brands. It's a social housing engineering business. So, we sort of operate across those three brands, British Gas, Hive and PH Jones.

 

[00:02:35.670] – Jon Slowe

Okay, but homes rather than commercial buildings.

 

[00:02:38.490] – Andrew Middleton

Exactly. Totally focused. We are within British Gas Zero on the UK housing stocks.

 

[00:02:45.260] – Jon Slowe

Yeah. And Andrew, in British Gas, as you say, you're already in 3 million homes, Hive is in 2 million homes. You've got lots of engineers. So, is this bringing together a lot of existing capabilities into providing new focus and energy? For a better word for that, is it doing that and adding on new things, or is it creating something brand new outside of what's already being done?

 

[00:03:12.830] – Andrew Middleton

Yeah, we're probably in that middle bucket. It's a really interesting mix, actually, of some mature businesses. PNL so Hive, PH J and is quite mature businesses as well as some kind of growth space for us, building on our existing capabilities in terms of brand, in terms of our heating network, our sort of heating engineering workforce, but also our links in with SMEs (Small to Medium Enterprises) up and down the country, who we work with for the energy company obligation, for example.

 

[00:03:43.100] – Jon Slowe

Yeah, okay, so bringing things together, adding some new things, putting a new wrapper around that, if that sounds the right way to describe it. Why now? What's the spark behind it?

 

[00:03:59.810] – Andrew Middleton

So, I guess British Gas, we have been on hand to support the UK through every previous energy transition. Be that the introduction of gas lamps in London 200 years ago, be it the rollout of the gas network decades ago, and we are determined to do so again during this climate crisis. And I firmly believe we are in a climate crisis. And I know within the industry, we're sort of primarily all here to help try and solve that, but I think it is important to kind of remain connected to that. And I'm constantly being stopped in my tracks, actually, when we see new bits of data which paint that really stark picture of the climate crisis. As you mentioned in the introduction, the energy crisis we've been going through over the last 18 months has brought energy consumption right into the forefront of consumers’ minds. There's a stat I saw where pre-energy crisis, consumers were thinking about energy for an average of seven minutes a year. If you think about how often and how regularly it's been on the front pages of newspapers over the last 80 Months

 

[00:05:08.940] – Jon Slowe

It’s a lot more than seven minutes now.

 

[00:05:11.060] – Andrew Middleton

Exactly. So never has there been sort of more focus and attention. And certainly, our research says that there's a huge amount of awareness of net zero and alignment behind the ambition, but consumers don't know where to start. So, our average customer doesn't really understand how the thermostat works. And so, as an industry, when we start talking to them about micro generation and demand-side response, they don't just switch off.

 

[00:05:41] – Jon Slowe

Foreign language.

 

[00:05:43.890] – Andrew Middleton

Totally, they're kind of really intimidated. And I guess…

 

[00:05:56] – Jon Slowe

If you're intimidated and confused, then you don't do anything,

 

[00:05:49.130] – Andrew Middleton

Totally. And then on top of that, you've got a media that is increasingly polarised and essentially, we've got two camps of media stakeholders. One camp saying that heat pumps are going to solve world peace, one camp saying they're going to create World War Three and there's not much in the middle. And so, I guess what we're looking to try and do for that kind of huge incumbent customer base is cut through simplify, do some of that heavy lifting and provide the right tailored advice. We don't think there's any sort of one size fits all approach.

 

[00:06:26.570] – Jon Slowe

And you can do that from that established brand. I was going to say trusted brand. And I think British gas is trusted. It maybe not gets knocked in the media. Maybe not every customer loves British Gas, but it's established and trusted.

 

[00:06:40.930] – Andrew Middleton

Yeah. And I think there's an important distinction between the engineers that are in customers’ homes and the corporate entity that will hit the headlines. And yes, lots of customers will trust their local tradesperson, but equally, we know that millions of customers trust that British Gas manor or lady. And so, providing that one-to-one guidance and advice I think is really critical to us trying to move this agenda forward.

 

[00:07:13.770] – Jon Slowe

Okay. Thanks, Andrew. Come back to you in a sec. I'd like to introduce now my second guest. Been on the podcast a number of times, LCP Delta colleague and expert, Nigel Timperley. Hello, Nigel.

 

[00:07:23.810] – Nigel Timperley

Hello, John. Hello, Andrew.

 

[00:07:25.480] – Andrew Middleton

It's nice to be here.

 

[00:07:28.750] – Jon Slowe

Nigel, you've been doing a lot of work recently on what I think you call the energy retailer of the future. And you've also been in this area for well, is it decades?

 

[00:07:43.680] – Nigel Timperley

Since the last century.

 

[00:07:44.990] – Jon Slowe

Since last century.

 

[00:07:45.760] – Nigel Timperley

We'll just leave it at that.

 

[00:07:48.870] – Jon Slowe

So, I'm interested in first of all, can you describe, in a nutshell, your vision of an energy retailer of the future? And then secondly, once you've done that, how what Andrew has described at British Gas Zero, how that fits into your framework?

 

[00:08:06.740] – Nigel Timperley

Sure, yeah. Well, we have been doing a lot of work in this area recently and with a specific residential focus, actually. And in a sentence, we believe the transition is going to turn energy suppliers into energy managers. The traditional energy supplier business model is antagonistic or adversarial. There's a perverse incentive for suppliers to encourage customers to consume more because the more they consume, the richer the supplier gets. Whereas that's inconsistent with today's goals to reduce consumption, improve energy efficiency, cut carbon, and indeed protect customers from price volatility, which has been a real issue over the last couple of years. Indeed, we think you can characterise the entire energy transition, certainly the downstream transition, as a change in the customers experience. So today customers are scarred by volatility. They want to do something about carbon, and they also want to deal digitally with their supplier, whereas in the future, we believe they want to be back in control. It's about autonomy and about having control over their energy prices because at the moment they feel out of control. That's a sort of change in customer experience. And to do that, the energy supplier will become an energy manager and collaborate with customers.

And that's where I do see an overlap with a very strong overlap, what Andrew is doing, because essentially, it's about giving the customer the tools to make that transition, to go on their own unique personal energy transition.

 

[00:09:55.870] – Jon Slowe

So, managing volatility energy management in reducing demand or increasing efficiency or generating your own an empowerment was the third thing you said in terms of helping to equip customers with the tools, the expertise to drive that forward.

 

[00:10:14.660] – Nigel Timperley

Yeah, we talk a lot at LCP Delta about engagement, empowerment and collaboration as a sort of logical journey. So, engagement starts with understanding from the customer, understanding their consumption so they can do something about it. Empowerment is about taking action, and collaboration is this sort of co creation of the future, whether instead of this antagonistic relationship where I win, you lose very commodity sales based together in this future, the energy manager works with the customer to co create their new energy future.

 

[00:10:48.590] – Jon Slowe

Yeah. Okay, Andrew, how does Nigel's vision align to your thinking? Are there similarities? Are there any differences or different emphasis?

 

[00:10:57.610] – Andrew Middleton

Yeah, no, I think there's a lot of alignment there. I think the empowerment word is crucial, actually, because Nigel touched on autonomy and there's a really fine balance to be struck, I think. And this is where we can take lessons from the journey Hive's been on, for example, where, in a way, Hive is doing all those three things that Nigel's described in terms of helping engage customers, in terms of their usage, empowering them to take action, but we're not leaving customers on their own. Right? And so, actually, because of the way the energy system works, it's complex. And actually, for the average consumer, they do need that complexity simplified. And so, the more that we can do the heavy lifting in the background that they don't need to worry about, so that they are empowered to take the actions, make the decisions that are important to them, the better. And so, I think it's that balance between removing the complexity in the background, doing some of that heavy lifting in order to simplify for customers on the front end, I think, is really crucial. And then collaboration is a word I'm really passionate about. And the beauty of a mission like ours in terms of helping reduce energy bills and carbon consumption is like it's a shared mission.

 

[00:12:16.180] – Andrew Middleton

It's quite hard to argue with that. Right. And so a big part of what I try and do is build the strongest network of partners to address that mission together. We think British Gas has lots to offer in this space, but we definitely don't think we've got all the answers. And so that's why we're super committed to building out a network of partners all aligned behind that mission.

 

[00:12:45.170] – Jon Slowe

And Andrew, maybe I should probably should have asked you this earlier. Where are you at with British Gas Zero in terms of when was that brand established? How new is this? How new are you in the role? Is this the beginning of something? Have you been at it for a year?

 

[00:13:00.700] – Andrew Middleton

Yeah. No. So I was asked to set the new business unit up in September of last year. It's an internal like we're an internal business unit within Centrica. The brand remains. Bridge gas plus Hive plus PHJ they remain the kind of consumer facing brands, but we've been kind of set up with a degree of kind of autonomy and independence in order to create focus and drive momentum behind this agenda. Because we've clearly got an established large business to run and kind of scaling at the sort of pace that our ambitions have, whilst running an established business is quite hard. That's why we've created this new business unit. We've been going at it since September.

 

[00:13:51.310] – Jon Slowe

Nigel used to work for E.on a long time ago. So, energy retailers have developed initiatives around this sort of thing before. And I don't want you think, Nigel, my view is that a lot of, and this is no reflection, Andrew, on what you're doing, but a lot of energy retailer initiatives like this probably haven't got the traction and that momentum, Andrew, that you talked about, that you're looking for.

 

[00:14:18.050] – Nigel Timperley

No, I think that is fair. There have been one or two honourable exceptions, particularly amongst innovators companies like Octopus in the UK, Tiber in Scandinavia and increasingly outside Scandinavia, in fact, where they have moved more to a collaborative model with less emphasis on pure commodity sales and more on helping the customer manage their consumption and emissions. Tiber’s model is really interesting because they don't profit at all from me as a customer using any more.

 

[00:15:02] – Jon Slowe

It's a pass through.

 

[00:15:07] – Nigel Timperley

Absolutely. You just pay a fee to access that service. And their whole model is around selling me tools to reduce my consumption. And then it becomes a credible sell as well. If I'm selling you something to reduce your consumption while at the same time benefiting from you increasing your consumption, there's clearly a credibility gap there the old, Why would my energy company want me to use less energy? Is a fair old challenge. Tiber don't have that problem. And as we see commodity sales diminishing. I think that the challenge to energy companies is do you want to stay there and compete for a shrinking pie, or do you want to move into this new opportunity space, which Andrew is looking at? Clearly. And I was interested in, Andrew, something you said earlier on, actually, about British Gas's brand because just describing in answer to what I was saying, our vision of the energy supply becoming the energy manager of the future you could almost argue British Gas has sort of both ends of that, and that energy supply gets tarred with the same brush as many suppliers of the sort of fat cat energy companies and all that sort of negative publicity. But as you rightly say at the other end, the British Gas engineer who's the one providing services, energy management services, they've got very high reputation.

They're often called in purely for a benchmark quote so that somebody knows, yeah, okay, that's the British Gas quote. That's where I work from there. See, you almost got a Schizophrenic brand that represents the two extremes. Does that seem a fair way of thinking about it?

 

[00:16:42.640] – Andrew Middleton

I'm not sure we'd describe it as a Schizophrenic brand. I think my marketing colleagues would have something to say about that. No, I think, as I say, our heritage and the trust that is placed in our brand is pretty hard to compete with, if I'm honest. I know of no other brands that are welcomed into consumers’ homes at the scale that we are, and that is a privilege that we take very seriously. So, we are very proud of the brand, we don't always get everything right and there are headlines associated with that and we can be quite an easy sort of target, I guess, when the sector is under the spotlight, but we take on that responsibility. And I think one of the things that I am conscious of, and I guess that I've observed since taking on this role in September, and I'm not an industry veteran, I've been with British Gas for about two and a half years. Prior to that was at EasyJet for seven or eight years. There are actually loads of similarities between the businesses, but they are quite different sectors. But what I've observed is when it comes to the net zero agenda and it comes back to the theme of collaboration, the market is crying out for leadership, actually. And so, there's a wide variety of stakeholders that have frankly been waiting for British Gas to come and provide that leadership on this decarbonisation agenda.

 

[00:18:33.970] – Jon Slowe

I agree with you on that, Andrew. I think it's a glaring gap in the market and it's a position that someone can take to be that trusted partner for customers to do the sort of things you described in terms of getting you talked about driving momentum since September and you're relatively not new into the sector but not had several years in it. What have you learned so far about the challenge of driving momentum and getting that growth and impact that you're looking for?

 

[00:19:08.270] – Andrew Middleton

Yeah, so a couple of things. So, I guess as we're building a business, one of the things that we are looking at as a challenge is where we get scale and the challenge at the moment, we're facing is the lack of demand density. When we're looking at the MCS data in terms of heat pump installs in 2022, I think the postcode with the most amount of heat pump installs was in Argyle and the west coast.

This is a remote part of the west coast of Scotland, which beautiful, I've got roots up there and so a special place, but it certainly doesn't have demand density. Right. We're talking about a remote part of the country now, its off grid, so hence why it's one of the places where we're seeing heat pump adoption. But the point is that with this lack of density and demand, it's pretty hard to get people to invest in building a strong supply chain to fulfil that demand and you get into this sort of situation. And so, I think demand density is definitely something that we're focused on, which is where some of the different segments come in, like social housing, like the new build segment. And so, I think we're certainly looking at those as opportunities to build out scale and build some of that demand density.

When it comes to the consumer segment, retrofit segment, the kind of two big challenges we face, I think, are the economics. So, the sort of total cost of ownership and where we are with solar, for example, the return on investment for a household is pretty compelling. It's quite a straightforward evidence-based business case and its low risk, it's straightforward to install.

 

[00:21:06.710] – Jon Slowe

You're not ripping up floorboards.

 

[00:21:10.950] – Andrew Middleton

I think we're sort of seeing the results of that in terms of adoption, whereas with heat pumps and this is something we're working on, I don't think we've got a strong enough public point of view on it yet. But we're trying to build the evidence before we kind of go above the line on it is like demonstrating that there is a compelling economic case for households to retrofit. And so that's where we again, I think we can benefit from bringing together the energy supply side, the Hive kind of home energy management (HEM) and insight and analytics, plus the engineering capability. So that whole affordability space. And I think that's where, again, we're expecting to lead innovation and disruption. We're working with banks on that very topic. Right. And I think to…

 

[00:21:59.130] – Jon Slowe

Remove that upfront cost barrier.

 

[00:22:05.090] – Andrew Middleton

Exactly.

 

[00:22:05.610] – Jon Slowe

Yeah.

 

[00:22:06.870] – Andrew Middleton

And so, we can look at some of the models that have been more successful elsewhere, like heats the service. At the moment, one of the challenges there is around the grant only being available, the government grant only being available to people that own their asset. And so, precludes that model, I think there's going to be innovation in that space. And then for me, I come back to this whole notion of the engaged part of what Nigel was talking about, how we do a better job as an industry of bringing potential customers with us. So, we're definitely still in this early adopter space rather than in the early majority, and we've still got loads more that we can do, talking as British Gas Zero, but I think as an industry, to simplify what we're talking about, make it really clear, demystify it and myth bust. There's so much myth propagation going on.

 

[00:23:06.970] – Nigel Timperley

Andrew, can I just talk through something? With British Gas Zero, there's lots of good stuff going on there, but is there a risk that there's a missed opportunity? I don't know enough about what you're doing, so this is where you can tell me how wrong I am. But you've talked a lot there, essentially about domestic energy services, which are all good things we're huge fans of, but we think there's value to be had in sort of meshing that with supportive tariffs, actual supply tariffs. So, again, I referred to Octopus earlier on. If you look at something like their heat pump offer. It's meshed with their Octopus Cosy time of use tariff, which has very cheap charging periods between 4:00 AM and 7:00 AM. Or something or 2:00 PM and 5:00 PM, both of those. So, you can charge up and that improves the business case for the customer by allowing them to exploit cheap overnight power. So, we believe that tariffs and energy services together are potentially mutually beneficial. Is that something you're looking at or thinking about?

 

[00:24:20.050] – Andrew Middleton

Yeah, no, absolutely we are, and I agree with most of what you say, but the one thing I would kind of question is that it might help the unit economics. And I think that's where I talk about the work that we're doing on evidencing, the right business model, business case at a household level, which includes supply tariffs, which might be a time of use tariff, but it might not be because that actually might be counted to the efficiency of the heat pump. It's that that we're, I guess, investing time in making in trying to get right. And so, yeah, like, I think I totally believe that the run costs of a heat pump are going to be the competitive battleground. Now, that might come through tariff, it might come through design. Like, actually, if you can out design the competition, that might create competitive advantage.

 

[00:25:17.600] – Jon Slowe

It might come from a thermal store. Yeah, lots of ways.

 

[00:25:21.990] – Andrew Middleton

So, we're definitely doing lots of that work. And I guess in this example, Octopus have done a good job of getting their experiment out into the public quicker than us. But we’ll be….

 

[00:25:39] – Jon Slowe

Not too far behind.

 

[00:25:40] – Andrew Middleton

No, exactly.

 

[00:25:39.870] – Jon Slowe

Andrew, you talked about demand density, and I can see the challenge, but I can see how you work your way through that. You talked about economics of retrofit and the discussion just now around tariffs and how they work together. And again, I can see the path through that. The third area you mentioned was engaging customers, moving beyond early adopters, taking customers on a journey, I guess. So how far along that journey are you? Is there still a lot more to learn there, or have you got quite clear ideas that you're close to bringing to market?

 

[00:26:17.190] – Andrew Middleton

I think we're moving forward with good pace on that front, but we've still got a load of room for improvement and there's a couple of things that we've done that I think are helping. So, I've spent most of May away from home. My wife doesn't thank me, but we've been doing road shows in village and town halls in some quite remote parts of Scotland actually, where we are taking some of this kit. So, we've got a heat pump, we've got solar panels, we've got a battery, we've taken them to village halls. We've set up for three days and we've just invited local residents to come and have a chat to us about it. There's no intent to sell stuff in the room it's very much about education and we're really borrowing the model that we adopted when we were helping roll out the gas network, where we invited local residents come in and learn about this topic. And so, we brought our experts and invited local residents and we had really surprised by how long people were spending with us. So, on average, there were people in there for probably like, 45-50 minutes.

 

[00:27:31.950] – Jon Slowe

They were interested, they were engaged.

 

[00:27:33.870] – Andrew Middleton

Yeah. And they're coming with a decent level of kind of what I would describe as superficial knowledge and an appetite to learn more. And it's that kind of discovery phase that as an industry or certainly as British gas, that we're not used to having to operate at that level because people know how well, they don't know how boiler works, but they're used to buying a boiler. They're used to buying energy. And so, there's not a discovery phase in the same way that there is here. Yeah, that's one thing we're doing. The second thing that we've done is we've launched our home health cheque. So, I guess through the energy crisis, we saw a huge number of online calculators and kind of tools being launched to help customers identify ways they might be able to lower their energy bills, which is great as a starting point, but they are generic. Right. And so, what our home health cheque is about is getting an energy efficiency advisor into the home to have a one to one conversation with customers about their personal circumstances, so their home, their occupancy, their behaviours and help them. What we leave them with is a personalised plan which could just include behavioural change, it could include some small investments, things like a smart thermostat, it might involve bigger investments like insulation, or it.

 

[00:28:58.190] – Jon Slowe

Might get them on that journey on that path.

 

[00:29:00.010] – Andrew Middleton

Exactly, yeah.

 

[00:29:01.710] – Jon Slowe

Keeping on the clock time, as always, is getting the better of us. So, let's bring out the talking new energy crystal ball. And I'm going to set the dial this week to just three years’ time, 2026. Nigel and I are chatting before I think predicting short, predicting the long term can be very easy. Predicting the short term can be much harder sometimes.

So, question for you, Andrew, is in 2026, where do you think you'll be at British Gas Zero and use whatever metrics you think are going to be the right way to describe the growth and momentum you think you'll have achieved in three years? And, Nigel, similar question for you. But energy retailers in general, and maybe think of it about how much progress will they have made to the vision that you described or at the beginning of that energy supply for the future? So, Andrew, first to you.

 

[00:30:06.240] – Andrew Middleton

Yeah, great. So, I guess in answering that question, and I want to do it quite personally, if that's all right, I'm actually going to start by taking you backwards in order to go forward. So, I want to take you back to the 26 January this year, which is a day during which I met a man called Matt. Matt's an architect based up in Aberdeen, and he's super passionate about doing something about climate change. He's massively frustrated with what he perceives to be a lack of action in the face of the climate emergency, but he's also got a vision. So, he wanted to show that with a bit of determination, it is possible for us to decarbonise communities. And his ambition was to turn his little village, a place called Daviot, which is in Aberdeenshire in the north of Scotland, into a blueprint for decarbonisation. There are 250 homes in Daviot and he's done a great job in sort of engaging his fellow villages on the climate emergency, but they need help. So that's where our road shows came in. So, our first road show was in a place called Daviot in his village earlier this year, just last month.

So, we went up to up to Daviot, we brought this kit. We've also committed a small amount of funding to help train five volunteers in the community for them to become retrofit assessors. That's a course that costs about £1000. That's nothing in the scheme of business-like Centrica. So, if I take us forward three years to 2026, I want to go back to Daviot, and I want to stand in that same village hall, and I want to celebrate with the residents of that village, who I envisage being the proud owners of maybe not 250 heat pumps, but let's say 150 heat pumps, let's say 105 EV charges, and let's say 90 solar panels. Now, Daviot might only be a small part of our country, but it's significant for me. It's part of the world where my granddad grew up, small fishing village, so I've got roots up there. And I guess my vision, is that Daviot is one of a number of small communities where we've helped make a difference locally. We've created jobs for people in those villages, we've helped them lower their energy bills, we've helped them reduce their carbon consumption. And it all starts with Matt.

 

[00:32:35.570] – Jon Slowe

One follow up question to that I love the story and I love the vision, comes back to the density question. How much of this, your journey in the next three years will be through communities, do you think? And how much of it will be the typical B2C non-community? Your answer would probably be a mix of both, but interested in your thoughts on that?

 

[00:32:58.960] – Andrew Middleton

Yeah, we do envisage it being a mix and it's not going to be a third or third or third, I don't think. I would expect maybe like 50, 25, 25 biassing to the kind of B2C retrofit space.

 

[00:33:20.210] – Jon Slowe

But communities are then a big part of it, then it's like a significant part of what you're doing. Yeah.

 

[00:33:24.320] – Andrew Middleton

And we really believe in a local approach. And so that is going to be a firm part of what we do. When I talked about density being a problem, you don't actually need that many properties to create.

 

[00:33:42.360] – Jon Slowe

You need a bit of density.

 

[00:33:44.310] – Andrew Middleton

You need a bit yeah, exactly.

 

[00:33:47.930] – Jon Slowe

Okay. Thanks, Andrew. Nigel, where are energy retailers going to be in comparison to your vision in three years’ time?

 

[00:33:56.570] – Nigel Timperley

Struggling to follow Andrew's answer.

 

[00:34:03.000] – Nigel Timperley

I suppose I'd take slightly different tack, which is we've just appeared to be coming out of a two-year energy crisis. We believe that this represents the beginning of a new era quite seriously. Customers have been traumatised by and scarred by the experience, and we believe that has moved us on. Okay. Whereas before, sustainability and efficiency were desirable, would now see them as paramount. And it's great to hear Andrew's working on customer education and empowerment. Totally support that. I think there are other factors, though, that will kick in over the next three years. Digital and AI (Artificial Intelligence), massive enablers, which we're doing a lot of work on at the moment. And obviously AI in many ways, is the technology story of 2023. And then the other one that Andrew, you did touch on very much so, actually, was green finance. What's happening in the banking sector is very interesting in how the banks have got extraordinary targets and to green up their debt portfolio. And that has profound implications for the energy sector. So, supported by digital technology, AI, and green finance, we believe this new area will witness the deployment of huge fleets of heat pumps and EVs in particular, with a role for home energy management in that as well, to optimise. I do think that is a step change. There are cyclical changes in our industry.

 

[00:35:41.230] – Jon Slowe

Will that step change, will energy retailers make that as well? Will the industry as a whole make that step change in three years, Nigel, or will some or will only a few, or how much of your neck do you want to put on the line?

 

[00:35:55.630] – Nigel Timperley

I think it will split down the middle. I think you'll have those who will see it as an opportunity, as I say, a new secular trend, and will seize the opportunity in the way that it sounds like Andrew's aiming to do, which is great, but the time for hesitation is past and there will be those who don't. But I think if they don't, there is now more risk in not jumping than in jumping. I think they resist.

 

[00:36:20.720] – Andrew Middleton

Yeah.

 

[00:36:21.230] – Nigel Timperley

You know, the tides out, they resist being they risk being marooned and, you know, fighting for a share and ever, ever diminishing commodity sales market.

 

[00:36:30.740] – Jon Slowe

Yeah. Okay. Well, if we don't have you back on the podcast, Andrew, within three years, we'll definitely have you back within three years’ time.

 

[00:36:40.190] – Andrew Middleton

Look forward to that. Thanks a lot.

 

[00:36:42.530] – Jon Slowe

We better draw it to close there. Nigel, Andrew, thanks so much for your time and contributions. Thanks as always to everyone for listening and remember to send us ideas for future episodes to talkingnewenergy@lcp.com. You can find updates on our social media platforms, LCP Delta website and follow us and rate us as well. Thanks very much and speak to you next week. Bye.

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