Tech savings bring renewables into affordability
The co-founder of Britain’s first digital renewable energy provider says that without digitisation, the firm would not be able to compete on price.
Steven Day, one of four co-founders to launch Bath-based Pure Planet, brought an impressive career in the telecoms industry to the firm, having launched Virgin Mobile in the UK before leading roles at Orange and EE.
The firm, now one of the main challenger energy companies supplying green gas and electricity, claims to be 20% cheaper than the 'Big Six', despite the higher prices green energy demands.
Its app-based model uses mobile tech to minimise cost, an approach which means green energy can be sold at wholesale prices.
Day describes the firm as somewhere between ‘EnviroTech’ and ‘GreenTech’, and says technology is at the heart of its offering.
The firm was created by Andew Ralston, Tom Alexander and CFO Chris Alliot. Ralston and Day previously worked together at Virgin Mobile in the 1990s and at other firms since that time.
Their initial plan for Pure Planet – a far cry from their familiar world of telecommunictions – was to bring modern tech to a sector which has been, according to Day, “frankly a complete laggard as far modernisation was concerned”.
The team had seen the telecoms sector quickly moving to a more involved and interactive billing experience, and watched as the first challenger banks emerged from the FinTech sector. But the interactivity was still missing from the energy sector.
Day says most suppliers, even today, operate via paper bills, many of which are distributed to consumers every three months.
“We found this a complete anomaly. It’s ridiculous and no way to interact with the consumer. How is anybody supposed to engage with their energy if they’ve never seen anything but a wad of paper on the doormat?” he tells BusinessCloud.
The founders had planned to coincide the launch of their business alongside the introduction of smart metering. They had hoped the new data from these IoT devices could be piped directly into Pure Planet’s app.
But Day says for all the clout the founders had in telecoms, they were “innocent newbies” in the world of energy.
“Naively, we thought we’d be able to launch with smart meters form the start,” he recalls, assuming that the national rollout of the new technology would be straightforward.
“Of course, that’s not come to pass, not just for Pure Planet but for the industry as a whole.”
The firm, which does use smart meters, contracts in the technology. Despite superficial design differences, this is an underlying public standard. Its adoption is key to a greener world, says Day.
“It is pivotal from a national infrastructure point of view because with smart meters you can count how much energy is being consumed across your country, in way you can’t in the analogue world,” he says.
This current ‘analogue’ world only provides energy usage figures based on guesswork, so there is no accurate forecasting. This increases energy waste, which Day says is around 11% at any one time.
The renewable energy market
Day says that the creation of the firm came at a time when price was the leading decision-making factor for consumers, a model which has the potential to cause a ‘race to the bottom’.
He says the model had led some companies to go bust, unable to handle a large influx of numbers. The few customers who did seek out green energy were those with both the conscience and money to afford the more expensive option.
The green offerings available in 2016 were around 20% higher than the market average, says Day.
“There was no real differentiator between the suppliers other than price. That’s not sustainable, and you’ll never be the cheapest forever.”
He says all the founders had realised the impact of the climate crisis even before the creation of Pure Planet, and were worried about their children’s future without a competitive non-renewable player.
All took an interest, but Day would go on to study the subject. The choice to make the firm renewable as well as natively mobile was obvious, he says.
“If you can count what you need and what you use you can be much more mindful of how you use your energy.”
A ‘double no-brainer’ through tech
Before the creation of Pure Planet, Day says it wasn’t possible to sell green energy competitively, but spoke to advisors in the sector anway. Consultants told them green is more expensive because of the levy and tax – but that didn’t meant it couldn’t be done.
“We found a way. In a nutshell, by making Pure Planet digital," Day explains. The cost savings would allow them to offer the more expensive green energy for less overall.
The digitisation made their offering 20% cheaper, offsetting the cost and making it a “double no-brainer” for consumers and a step closer to making renewables the new normal.
“Things have moved on a lot over the last few years, with the help of David Attenborough and Greta Thunberg – but more seriously with things like national laws on pollution." Britain is at the forefront, he says, though not everyone knows it.
Day says the UK already has the technology it needs to become completely renewable and only needs more renewable generation through wind and solar - and better storage - to make it a reality.
In fact, the recent extreme winds caused wind-power to soar “literally off the charts”, creating ‘negative retail pricing’.
“In 2018, three-quarters of houses were using renewable energy. With everything included, we’re about 60% off. It’s a typical British thing that we don’t celebrate success well. It’s one of our best-kept secrets.”
The goal of ‘net zero’ emissions, which Day says is a bit of a buzzword, will require the reconfiguration of companies across the world. He pointed to Microsoft going carbon negative, to offset its historical use of non-renewables.
The companies and providers which aren’t yet at that point now are going to have to reset as the technology evolves further. Renewable tech is also trickling down to the consumer-level, with the likes of solar power now possible from one home to the next.
Day does not see these ‘micro-grid’ technologies as a threat to the traditional structure of a national energy network, but believes the companies within that network are also going to have to go green to stay part of the conversation.
“Once you’ve earned the right to talk about renewables, you’ve earned the right to talk to consumers about micro-grid technologies,” he says.
“We do and will encourage a decentralised energy grid. You will find that to be the new normal in 20 years.
“We’ll start to think about how we want to charge our electric vehicles, and if we can sell the power in our electric cars back to the grid. Or can we use it to power our own home?”
Day says a battery in the home will become as normal as a dishwasher in the near future, and the increased freedom will allow us to think about both buying and selling energy – which is why a two-way platform like the type built by Pure Planet is so necessary.
These batteries will emerge alongside the public’s understanding of ‘green intermittency’; the idea that energy from wind and solar should be stored in theses batteries as it is created, and used when necessary.
He hopes Pure Planet will be the brand at the forefront of both green and micro-grid energy as the world’s energy sources devolve and become more complex.
“The future is going to be much more personal, relevant and local,” he says. A two-way street, where energy can be traded from supplier to household, and household to both.
“Our view is that we can grow this business to be something that’s sizeable, meaningful and a player both here in Britain but also beyond and is playing a leading role in the digitisation of energy services.”