Engie chief says more value in reducing consumption than supplying energy

The head of Engie UK believes the case for reducing consumption is now more attractive in terms of value than the supply of energy.

Speaking at the Financial Times Energy Strategies conference in London, Wilfrid Petrie said power utilities can go down the same path as the telecom industry of the 90s in evolving into services-oriented entities.
Wilfrid Petrie at FT Energy Strategies
Keynote speaker at the event, Petrie spoke about how Engie has chosen to adapt to the turbulent seas utilities have found themselves battling over the last decade.

“This transition to clean has not been smooth and will not be smooth. Over the last six years, European utilities have had to write off EUR100bn worth off assets and mothballed around 60 GW of gas-fired power plants. It feels more like a revolution than a transition.”

Unlike previous energy transitions, from wood to coal and coal to oil and gas, Petrie said this one differs in the sheer speed of change, thanks to the number of technologies now available and the ability to motivate and mobilise the public more than ever before.

The French multinational utility has opted to transform how it operates, going from a linear conventional model, as so reliable for the sector in the past, to a more holistic alternative. Petrie said this was motivated by a need to focus on a non-merchant contracting business, less exposed to policy changes.

“In the UK a couple of weeks ago, for example, we completed the acquisition of KeepMoat, a regeneration business. They refurbish and increase the energy efficiency of buildings and they have a significant role in transforming communities for the better.”

“To date for instance they have installed solar PV on the rooftops of over 20,000 buildings. I think this is important because buildings account for 30 per cent of emissions in the UK.”

“in addition I want to underline one of our convictions about the UK, and that is the future of energy will involve the combination of energy and services. I like to use the example of Telecom industry in the 90s. We would get a monthly bill for the number of calls we made. Today most of us have household packages which involve, unlimited calls, broadband, TV.”

“The point is what used to be telecom companies selling line rental are now sophisticated providers of a broad range of communications and perhaps most importantly of content.”

Petrie says the disruption should be viewed as a time of great opportunity.

“Today you can redevelop a building using the re-generation capabilities we have, improve the energy efficiency, and we also focuson data analytics to measure and predict the consumption. We want to go beyond the supply of services itself and offer services to improve wellbeing and working with councils we will fight to beat fuel poverty.”

Petrie then told the audience what he referred to as two important messages.

“There is more value today in reducing consumption than supplying energy itself. I also believe there is more value today in end results and not just selling kilowatt hours to the grid.”

Then referring to the company’s entry into the UK domestic market, he said it was a natural extension to the company’s business.

“Most people say It’s a highly competitive market, with a high degree of scrutiny and huge amount of reputation risk, and if you make profit you are punished for having some. So why did we think it’s the right thing for us to do?

“We are a big player today in the B2B and SME markets so it’s a natural extension for us. I think more importantly we wanted to enter this market and offer something different, isn’t that what revolution is all about? Making differences?”

In line with the company’s comprehensive services approach, Petrie says Engie wants the UK to benefit in a way not entirely possible in the current fragmented scene.

“I think most services for customers today, whether battery, solar pv, don’t have a strong business case in isolation. PV is not good if you can’t get planning consents for example and I think connected devices make more sense if you can install them as part of a refurbishment. It’s this holistic approach that matters and make business work more effectively.”

Today we are clearly in a sector with lots of disruption but with lots of opportunities and it’s an exciting sector to be in. The revolution in the energy sector will transform the world for the better.”

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