A business case for energy retailers to help decarbonise the C&I industry – pv magazine Australia

All eyes are on the commercial and industrial (C&I) sector and the importance of decarbonizing one-third of the total electricity demand that it collectively generates on the grid.

The Government of Victoria today announced an initiative to consult with the sector on the potential benefits of a Market facilitation platform, to help companies access renewable energy purchase contracts (PPAs).

Jessica Venning-Bryan, Chief Customer Officer of Flux Federation, a software-as-a-service provider serving the retail energy sector, approaches the challenges from a different angle. She believes that regardless of how C&I customers approach their transition to renewables, they will need the services of energy retailers and that retailers need to deliver new tailored and flexible services that bridge the gap between commitments. decarbonisation of businesses and the achievement of a reliable supply of renewable energy.

She spoke with fashion magazine on the need for a technology allowing an innovative tariff design and precise invoicing for all the energy needs of a C&I customer, including the reverse flows of its own renewable production.

pv magazine: What are the issues facing the C&I industry regarding energy supply?

Jessica Venning-Bryan: Anyone with a trade volume load is really starting to think about how they’re going to decarbonise themselves. Australia has seen a lot of very promising engagements from some large companies, As Coca Cola Amatil and Coles supermarkets who are committed to 100% renewable energies within certain deadlines.

These are good examples of companies that have taken a public stand, but they really only have two ways to get there: either they do it through a PPA power purchase contract with a renewable energy producer, or they have to do it themselves behind the meter. – or a combination of green energy purchased behind the meter.

It can be difficult to make progress in setting up the right kind of commercial construction for a PPA.

Beyond the meter, the investment required to build a plant large enough to meet the load of many C&I customers is quite large, and that plant requires maintenance. So the mixed model is probably the most realistic – where you do yourself a part of that generation behind the meter and then buy a part of it on the market.

So these big companies are at an interesting time when there is a lot of public pressure, and their license to operate more broadly is tied to a commitment to decarbonize, but the question becomes, “How are we really going to do it?” What makes the most sense? ”

Inevitably, whatever option you choose, you must always have a billing relationship with some retailer. Most of the billing software currently used by retailers is not sophisticated enough to adapt to this new world. C&I has always been the poor cousin when it comes to software investment by the energy sector.

Why is that, when they can represent such a large part of a retailer’s income?

Mainly because they are largely managed by accounts, so they are very relationship-oriented clients. Mass market customers are much more likely to change if they have a bad customer experience that cannot be smoothed out; and residential consumers also have different expectations about what the service looks like, how they engage with their utility, what their app does. These services have kind of been sidelined in the CNI sector, but it can’t work like that anymore.

Today, the C&I sector, because of the public commitments it has made, must find ways to both meet its own energy needs and to do so in a commercially viable manner, which means that he will ask and expect more from their retailers. Then we come back to this industry-wide conundrum of how the software we use to manage our customer relationships, including billing, how does it adapt to these new technologies.

What do you see as the fruit at your fingertips – industries that could provide great demo points for innovative pricing and perhaps flexible billing?

Any business that has high cooling needs. So the grocery store, for example, cold rooms, anything dairy, anything that has a very high refrigeration load, because it has to work 24 hours a day, 7 days a week. So there are other heavy load industries but only during the main working hours of the day. Manufacturing is a good example; Although some manufacturing plants operate 24/7, many of them are only working, either 16/7 or 16/5. Refrigeration is the most important then manufacturers operating 24/7 and large data warehouses. Data processing is becoming increasingly relevant as tech companies move to Australasia from other parts of the world and Australasian tech companies grow. And of course, you have to go to all the companies that have really started to take an interest in their own energy consumption and carbon footprint.

When we start to think about climate change, it is very important that people do their part at the household level, but huge gains are going to occur when these big companies start to decarbonize, and it is in everyone’s best interest to help them do it. A third of the energy demand in Australia comes from the commercial and industrial sector. This is why Flux Federation and our parent company Meridien Energy [New Zealand’s largest gentailer] are genuinely interested in this sector because we know it has been technologically underserved, and we know that humanity globally has the most to gain by facilitating decarbonization.

So what is missing in the retailer-C&I-consumer relationship?

From a retailer’s perspective, when they have customers doing certain things behind the meter, but they also have to top up their load, how do you actually juggle those two things? In order for the retailer to have a business relationship with the customer that is meaningful to both parties, it takes a little innovation in the way this tariff is designed. While a company may have invested in PV and a battery, there are still challenges around the intermittence of renewable energies. Batteries make this a bit more manageable, but it doesn’t go away completely, which means that in this business relationship between retailer and customer, they have to design a price that is not time bound but more focused. on the load. There are a lot of ways to do this, but you automatically end up in some pretty complicated pricing structures.

Our FlexiBill product is a truly flexible interface for retailers to design these rates. They can almost have pricing based on the customer and tailored to the specific needs of a site, which is very important. You’re not going to walk into the Coca Cola factory and a Unilever factory, for example, and see exactly the same setup with exactly the same demand. They can be in different states, where the weather conditions are different, which means the production environment is different.

So really, the industry is going to have to be a lot more tailored to the specific needs of the customers, and they justify that because they’re big consumers, so they’re profitable for the retailers. But operationalize a suite of very personalized tariffs… it may be good to do it once for one customer, but how to do it for 1,000, 3,000 or 5,000 customers. Being able to offer these very personalized tariffs which are very designed around the production portfolio of a particular C&I company, and very tailored to their particular consumption needs, is where the market needs to go, but they need to have software that allows them to do that and that’s what we offer.

How can flexible software at the retail level enable greater use of renewable energy?

It’s about creating a business environment that works for all involved. We’re not going to see more commercial and industrial grade customers investing in these renewable behind the meter technologies unless they can actually make a business case, and being able to make a business case depends on what you do. are going to charge for the times when you are not producing your own energy, and also potentially your ability to export it as well, at a competitive rate. PV to the grid or EV to the grid or battery to the grid; these types of flows must also be negotiated commercially between the retailer and the customer. So, until the retailer can innovate around a particular customer, the customer is very unlikely to find a business case that makes sense for them to invest in renewables, so they won’t. not. All the elements of the system need to come together to get energy-consuming customers to invest in renewable technologies.

What level of awareness are you having at the energy retail level?

I do not know if they join the dots between these commitments that are made in the C&I customer area, and how they can activate them while obtaining a commercial result for their companies.

No one needs to become a charity [in the name of mitigating climate change]. The system has to make sense to everyone, and retailers provide a significant set of services that they should be able to charge for, but they have to keep up with these emerging changes and the willingness of some of these big customers to invest, and be able to adapt to this, but also to create good results for themselves.

Time and time again we see retailers doing very manual and labor intensive things to make parts of their operations work with a more modern system. But you don’t need to do it anymore. There are many aspects to the value of investing in a more modern software stack to run your business. I think the thinking is there, but I’m still not sure if people really understand the operational reality for their teams of serving this emerging C&I client, and some of the bigger questions around decarbonization, and indeed how good it is. that would be easy to close.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of pv magazine.

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