Talking New Energy: In conversation with... Carlota Pi Amorós, Holaluz

[00:00:01.760] - Jon Slowe

Welcome to Talking New Energy, a podcast from LCP Delta. I'm Jon Slowe.

[00:00:07.640] - Charmaine Coutinho

And I'm Charmaine Coutinho. Together, we're exploring how the energy transition is unfolding across Europe through conversations with guests at the leading edge.

[00:00:16.560] - Jon Slowe

Hello, and welcome to the podcast. Today, we're going to Spain to talk with one of the movers and shakers in the Spanish energy transition. Delighted to be talking with Carlota Pi Amorós from Holaluz, Hello, Carlota.

[00:00:31.600] - Carlota Pi Amorós

Hello, Jon. Thank you very much for having me in the podcast.

[00:00:35.200] - Charmaine Coutinho

Carlota, hi. Maybe if you could start by giving the listeners a bit of an elevator pitch for Holaluz.

[00:00:44.260] - Carlota Pi Amorós

Thirteen years ago, we were in a bar, my two co-founders and myself, Oriol and Ferran. We were discussing there after graduating from our MBA, on what can we do to develop some technology to… to try to make this sometimes a little bit troubled world a little bit better. After the third beer...

[00:01:05.940] - Charmaine Coutinho

*laughs*

[00:01:06.300] - Carlota Pi Amorós

I went to my backpack, and I took out a paper that said on the front page, Connect people to green energy. This is what the Holaluz is about. We develop technology. We are a green tech. We are the developers of green technology that produce an energy management platform technology that allows us to connect independent power producers, all of them, professionals, meaning hydro, wind farms, at-scale solar, biomass, biogas, and also residential producers, people that own a home energy system in their rooftops plus battery. We connect those producers throughout our energy management tech platform with residential customers all across the country. This is what Holaluz is about. It's a tech platform that connects people to energy, allowing residential customers to use green, easy and cheap electricity.

[00:02:09.360] - Charmaine Coutinho

Lovely. Many of our visitors may have heard of you, but for those of you that haven't, can you give us a little bit about where you guys are based, which market you operate in?

[00:02:22.040] - Carlota Pi Amorós

We are, Holaluz, we are based in Barcelona, next to the sea. We have a team of roughly 250 green energy rebels that wake up every morning for executing on the energy transition in Southern Europe. For now, we operate in Spain and Portugal, focusing on the residential and small and medium businesses market. And recently, we increased our capital, and we welcomed into our investors team a new European investor that is also allowing us to dream of the potential of going abroad in the midterm.

[00:03:03.740] - Charmaine Coutinho

Lovely. Okay, fantastic. And sounds like there's lots of really interesting words you use to describe yourself. But if I was to ask you how to describe yourself, what would you say you are in the energy market?

[00:03:15.940] - Carlota Pi Amorós

As a company, you mean?

[00:03:17.000] - Carlota Pi Amorós

Yeah, yes. Oh, yeah. So not you, not you personally. An energy rebel, you've already told us that.

[00:03:22.190] - Carlota Pi Amorós

Well, we are at the lead of the innovation for energy transition for the last 13 years in the Spanish or in the Iberian market. So, we've been the first big-or energy company in the whole continental Europe. We are number one in ESG worldwide, according to Sustainalytics. We've been paving the wave for other green techs all across Europe to develop also their green energy tech platforms. We've been awarded in 2021 for being the first dispatching centre, 100% cloud-based in a joint project that we did with Amazon Web Services. We've been, or we are for the last 13 years, the leaders of the disruption of how energy is consumed, produced, stored and managed in the country of the sun, achieving a different milestone all across this way up to the summit. I would also describe ourselves as an optimist company, a company that innovates on behalf of our customers, not only the customers that we have now in our portfolio, but also the customers that are not even born. We are innovating on behalf of the generations to come. We are the ones that are pushing the boundaries of something that is so transformational for human life, such energy. We started in our home country, we started in Spain, moved to Portugal, and with this aim to expand ourselves across.

[00:05:06.760] - Charmaine Coutinho

That's lovely. Oh, Jon, that's a really lovely way of describing a company.

[00:05:10.240] - Jon Slowe

One of the challenges, Carlota, is people in the energy sector like to put companies in boxes. And particularly if you look backwards, people think of a retailer selling electricity, tariffs an installer, installing solar. We've got this new type of companies, these platform companies, aggregators, flexibility service providers. You mentioned technology. So, from what you've described, Holaluz is blending a lot of this together. Would you describe yourself as a new category of company, or what boxes would you put yourself in in the old energy world?

[00:05:53.410] - Carlota Pi Amorós

I would say that we are not an energy retailer, although we act as one because, of course, for connecting people to green energy throughout our energy management tech platform, we need to act as energy retailer because, of course, we buy electricity from green independent power producers through PPAs (Power Purchase Agreements), also to residential customers that have become a new consumer for the system throughout also micro PPAs. Some of them, they do have batteries. We also put together all these batteries and we are playing also the game of the virtual power plants (VPPs). This is something that regulatory-wise, it's not fully developed now in Spain, but it is on the way. It's coming. We are also leading this transformation, also leading this, shaping the legal landscape for making that happen. Meaning we are not an energy retailer because this is not where the backbone of our business, of our strategy lays, but we need to act, of course, as an energy retailer. In terms of installation, we are not installers because this is not the core of our business at all, but we need to act as installers as well. Why? Because we need to create the asset, we need to create the home energy systems that are able to be connected to our energy management platform.

[00:07:24.620] - Carlota Pi Amorós

In a way, we need to create those home energy systems that are smart because we need them to get connected to the platform and we need to operate them from our platform because otherwise, if they were to be only self-consumption, if they were to be non-action actionable throughout our energy management platform, then they would not serve to the purpose of buying this excess electricity through these micro PPAs for using it in the energy management platform and connect that electricity to a residential customer. Meaning that, of course, we are a new category. We are a green tech company that creates a platform that enables the green energy communities. We are the biggest and most impactful green energy community in the whole Europe by adding up on our energy management platform, all these micro energy communities that we… we have in those 12,000 home energy systems that we have already installed. We also have this possibility of connecting the independent power producers at scale directly with our residential customers throughout the energy management platform. But if we need to tick also the boxes of the old industry, as you were mentioning, Jon, of course, we also act as a retailer and we also act as an installer, even though those are not the main functions or the core functions or the things that differentiate our strategy and create value for the long run.

[00:09:11.530] - Jon Slowe

I think in pictures quite a lot, and the picture in my mind is in the middle, you have your platform, which is making all the connexions with people. It's got the tech optimisation in it. And then you've got branches coming off that platform, one branch going to PPAs, another branch going to customers with solar, the micro PPAs, another branch going to customers without solar, but maybe installing solar. Yeah and, I think it's a really good illustration of how the old value chain in energy is... Not breaking down, that's maybe too strong, but there are new types of companies emerging, new ways of combining or acting across the value chain as we see more distributed energy.

[00:10:02.210] - Carlota Pi Amorós

That's the key word, Jon. Distributed energy, because also we act as a distributor because we skip the need of using the transportation network that transmission network because electricity gets now produced in the very same local area where it's going to be needed. Therefore, we are not acting as transmissioners, but we are skipping the need of using the transmission network. Why? Because we produce within the next 2,000 metres, creating these energy communities, and therefore, there's no need for the usage of this infrastructure. This is very good for everybody, not only for the end users of that cheap, green and easy electricity. It's also insanely good for the system and for the industry. Why? Because one of the main bottlenecks that we have now in Spain for an industry to be provided by cheap and green energy is the transmission network because it is a bottleneck. Therefore, if we were able to move this 20% of the electricity that the residential sector needs, move it from being produced centralised and producing and storing it and managing at distributed level, at local level, that frees up a very considerable amount of bandwidth in the transmission network and therefore allow also the industry to be provided at way more competitive prices through green energy.

[00:11:50.460] - Jon Slowe

Yeah, it's not about distributed or centralised. It's about both because we're going to see big wind farms and small. But the more the energy, that supply, and demand can be balanced locally in the way you described, I think that's going to be a key trend in the next years across Europe is opportunities to balance supply and demand locally.

[00:12:13.680] - Jon Slowe

I want to ask you a question about your tariffs, which is just one of the branches off the connection that we talked about in the middle. And then, Charmaine, I know you're curious about the zero bills offer. But on tariffs, you offer dynamic tariffs, and dynamic tariffs are a bit of a buzzword, but they're really for risk-takers, I think, to some degree. You offer normal tariffs, and then you offer this quite interesting flat tariff, which is fixed within a certain level of consumption. And that's for, I imagine risk averse people. But I'm really interested in what you've learned by offering these three types of tariffs or the two ends, the two extremes. How many risk-takers are there? How many risk-averse people are there? How have you learned along the way with this?

[00:13:03.320] - Carlota Pi Amorós

A very interesting data point or important data point before addressing this question, Jon, is that in our customer base, almost 100% of the customers, they own a smart metering system, meaning that we have access to hourly energy usage for almost all of our customer base in the residential sector. For the SMEs, the percentage is not 100%, but it's reaching 85 plus percent.

[00:13:35.240] - Jon Slowe

The companies in Germany would be so jealous.

[00:13:38.300] - Carlota Pi Amorós

I know. That's very crucial because the access to data that we have is massive and very good. The delay, it's not real-time data, but it's at most with a delay of 24 hours, meaning that we have access to very good and very recent data. Why do I make this point? Because for being able to take on risks out of the back of the customer, we also need to back up our risks using our capabilities. Those capabilities lay on the energy management tech platform and on the heavy use of this data. The first layer of tariff that we have is a tariff that barely doesn't add any value because it's the same tariff that you can buy out from the government. It's like the dynamic, as you said in a fancy way, the dynamic pricing, whereas it's just a purely indexed tariff to the wholesale market. This is for risk-takers, but also for companies or for families that really can do something on their behaviours for using electricity. And what we've learned, after all for these 13 years and analysing data on a day-to-day basis is that on this market segment that we operate, that is residential customers and small and medium businesses, electricity is used completely inelastic to price.

[00:15:19.410] - Carlota Pi Amorós

Why? Because there's very few end users that really can adapt their patterns to energy prices. Why? Because you give back to your when they need to get bath. You cook dinner when you need to cook dinner. You put the AC on or the heating system on when it's cold or hot. It's very difficult for a family or for a hairdresser saloon or for a dentist shop, really to adapt their energy usage to the electricity price. That's one thing. Second thing, if we were to look into the breakdown costs for an SME, on those SMEs that we are focusing on, electricity price comes at most on the fifth or… or six position, meaning that they will never trade the possibility of operating on a good way their business for optimising the last Euro cent per kilowatt hour. That's one thing. We have this tariff available because there's always somebody that believes that, or this is their entry point, and that's why we have the studies, but this tariff available. But this is not the tariff that we encourage because we really believe that doesn't have a lot of or non-value add.

[00:16:28.770] - Charmaine Coutinho

I think that is a really interesting and relevant bit of information because there's so much conversation around behaviour shifting when it comes to energy use, but you're right. The majority of energy use is inelastic. People don't want to change it. It's not a biggest priority to save a few pounds consistently ongoing, right?

[00:16:51.730] - Carlota Pi Amorós

It's not their biggest priority, as you said. Even if it were, it really doesn't change the bill in a… in a noticeable way.

[00:17:01.590] - Charmaine Coutinho

Yeah, exactly.

[00:17:02.620] - Carlota Pi Amorós

All your laundry in the cheapest hour of the day, every day, you would save less than one Euro per month. In exchange for a up at 3:00 AM, so it doesn't work.

[00:17:18.640] - Charmaine Coutinho

Yeah, I definitely value my sleep more than I value €1.

[00:17:23.850] - Carlota Pi Amorós

Exactly. Very good point.

[00:17:25.800] - Charmaine Coutinho

That's not just because I've got young kids. Jon mentioned this earlier, but I am really interested, and it's something that is gaining a bit of traction in other parts of your zero-bill proposition. Could you describe for us and for the listeners a little bit about how that works?

[00:17:43.410] - Carlota Pi Amorós

On this last layer of taking away all the risk from the back of the customer, so second layer would be securing the price, and the risk volume is on the customer. That would be what we call the Classica, the classic tariff.

[00:18:01.740] - Jon Slowe

The normal one.

[00:18:02.720] - Carlota Pi Amorós

The subscription tariff. Yeah. The normal one, exactly. Then on the third layer, we have the subscription-based, where we take also off the back of the of the customer, the volume risk. We can do that thanks to the control and knowledge of the data because we know what's going to happen. This is not about that people do not care or people want to misuse electricity at all. It's about people using the electricity whenever they need it on a responsible and normal way. Since we have this connection to at most 24 hours delay, we can detect very easy whether this electricity is being used or whether the change of behaviour happened because they got an electric car, for example, and then we repriced. Then on the last layer or the last level for now of taking risks from the customer, we have this put together or operational risk of a home energy system plus the legal risk, meaning that if you are to bet on the energy transition and you are to bet on a company like Holaluz, we put together in your rooftop your home energy system, solar panels plus batteries, and we take from you the risk that those batteries are going to work, the solar panels are going to work, the number of sun hours that we've predicted on your rooftop are going to happen, and that will click together with your electricity usage.

[00:19:41.210] - Carlota Pi Amorós

The best way of taking that off, that risk of you, is signing off a contract that assures you that for the next five years, you will pay zero. It's on the same concept. Thanks to leveraging our technology and the data, and also now leveraging our operational knowledge and our legal knowledge or how to make that energy community work and happen, since we are the disruptor of the market, and therefore, we are the only ones doing this, the best way to make the fact that we are pioneers tangible for the customer is assuming that in a contract. That's the rationale behind, right?

[00:20:29.540] - Charmaine Coutinho

Yeah, I really love the fact that you talked about both the data, so you understand the data and you've got the experience of that, but also the legal bit, because I think that is the bit that people, when they've had similar ideas, have come unstuck because legally, how does it all work, but you've obviously gone through that process, so you can come through with what's the right legal offer contract for the consumer. But yeah, it's an important point, really, I think.

[00:20:55.170] - Carlota Pi Amorós

Exactly. Also, what's going to happen with the future electricity prices, not because really that curve, what's going to happen, whether the prices are going to be up or down. For a customer, that doesn't matter anymore because we assure this customer a five-year zero bill. Then what does create that? It creates visibility for the customer on how this customer is going to recover from this investment. Because if you ask somebody to put €15,000 down for investing in a home energy system, the best way for this customer to do their calculations on the payback is that, okay, so for now, I was paying on a monthly basis €250, for example, because it's normally are normally those a little bit bigger houses than the average. It means that in the next five years, five to six years, I will get my money back. That without any on the behaviour. Because the same thing that I was saying before that electricity gets consumed completely inelastic to pricing for residential customers and small and medium businesses. What is also true is that once a family has started their energy transition journey by putting on their homes a home energy system, then it starts a rational and a need of fully electrifying their energy demands.

[00:22:31.010] - Carlota Pi Amorós

What's going to happen for sure, and we have hard data on that, is that the very next car that this family is going to buy, either next year or in six years from now, is going to be either a full electric or a pluggable hybrid. When you put mobility into the equation of savings compared to the investment, then the numbers that we have on average prices and on average consumption that not segmented to these bigger homes is that within the first 20 years, the savings are almost €100,000, meaning that you pay for your home energy system for sure, and even for the car.

[00:23:18.780] - Charmaine Coutinho

Yeah, interesting as new.

[00:23:20.690] - Jon Slowe

What have you learned most from working with customers, Carlota? Because this is a journey for customers, and every customer is different. When you look at the journey that you're trying to take customers on, what would be the one thing that you've learned or one thing that stands out over the years?

[00:23:41.660] - Carlota Pi Amorós

The first learning that we took is that at the beginning, when we started the company as engineers, as a technical company, as a software development company, our mission was to educate the customers and pass on all of our knowledge so that the customers will take their own decisions. But that didn't work at all. People doesn't want to get a PhD on the electricity system, doesn't want to do that, doesn't want to spend their lives on that. They want to trust somebody that can give them enough proof that the technology, the knowledge, that the capacity of taking on the legal risk and all these things, and then they want to trust this company. They want to trust this partner. That was a revelation to us because it took us four years to realise this because the better the products that we were launching on the market, and the better that we asked the customers to switch, it was even harder. And one day, we took the other path. We decided to be the ones that create the magic behind the technology and that takes the hard decisions or the difficult decisions on behalf of the customers.

[00:25:09.240] - Carlota Pi Amorós

As I was mentioning before, we really feel the duty of being the ones that innovate on behalf of the customers. Then when we did that switch, everything started to blossom. Because instead of having an attachment rate to the new product that was way better for the customer of 20%, we had this attachment rate of 20%, meaning that 80% of the customer portfolio was switching to the product that was better for them. That was one of the first knowledges. Second thing is that even though every customer is different because every person is different, every family is different, the basic human needs that people have are completely across ages, races, gender, and political beliefs. If we are able to supply, to offer a potential customer a product that allows them to become a hero from the comfort of their couch to become a green energy, only by pressing down a couple of buttons and investing 15,000, maybe. But with this, they really have deep inside the belief and the certainty that they are part of the solution, this really calls on almost everyone. That's why maybe the rational or the rationale of the offer, it's different for everybody.

[00:26:50.460] - Carlota Pi Amorós

Somebody gets better on service, on pricing, on green energy, on purpose, on whatsoever. But if we are able to produce products that people can join easily and that really makes them feel better, that they are part of the solution of something that is huge, that is fixing climate change, that works across every segment.

[00:27:18.170] - Jon Slowe

I love what you just described. It's trust. It's something offer customers that something is simple and easy customer proposition, clear, and that people can sign up to it and feel good about themselves. The energy sector is not very good at this. You've clearly learned to hit, but the energy sector is not very good at it. Giving our time we're coming up to crystal ball time, Charmaine?

[00:27:49.030] - Charmaine Coutinho

That's right, Jon. I was just about to interrupt you.

[00:27:52.830] - Jon Slowe

*laughs*

[00:27:53.570] - Charmaine Coutinho

Carlota, you came to our summit. You spoke brilliantly at our summit last year. You'll be familiar with our crystal ball, which had an appearance there. Could you give us, looking 10 years into the future, into 2035, and give us a bit of a picture of where you think Holaluz is then?

[00:28:12.660] - Carlota Pi Amorós

It's going to be then. I would picture ourselves being at the lead of energy transition, I don't know whether the technology by that time it's going to be virtual power plants or we are going to be also in green gas because we do have the vision and we are investing quite a lot in that green energy will traspasse the electron and will get into the molecule sooner than later. I would picture ourselves as being at the lead of this energy transition not only in Spain and Portugal, but also in other countries in Europe. I would love also to be somehow in Africa. Africa, I think that it's the very next big thing that we need to address if we really are serious about energy transition and about developing humankind. I would picture ourselves also as still very positive, joyful, optimistic bunch of people that still believe and that still push every day for making that happen.

[00:29:21.730] - Charmaine Coutinho

Yes. More everywhere, but still rebels, being very positive at heart, I think. There's a really nice description having a company that's still keeping true to their core culture. Fantastic.

[00:29:36.390] - Carlota Pi Amorós

Absolutely.

[00:29:40.290] - Jon Slowe

Well, I think we'll have to draw it to a close there, Carlota. You're You describe joy, optimism, positivity. That's shone through in the discussion. I'm sure listeners will have enjoyed the episode, been inspired, and if they don't know Holaluz, now they know a bit more about who you are and what you do. So, thanks very much, Carlota. Thanks, everyone, for listening. We hope you enjoyed the episode and look forward to welcoming you back next week. Thanks, and goodbye.

[00:30:11.510] - Carlota Pi Amorós

Thank you.

[00:30:12.770] - Charmaine Coutinho

Thanks for tuning in.

[00:30:14.110] - Jon Slowe

If you're enjoying the podcast, please subscribe. And we'd love it if you rate and review it with us. And, of course, share the podcast with colleagues.

[00:30:22.330] - Charmaine Coutinho

And if you've got suggestions for guests or topics for the podcast, please do let us know.