Reflections: one year on
Last month was a momentous one for Nexergy, for a few reasons. With great excitement, we launched the Nexergy Ready plan with our retail partner Energy Locals. If you missed our earlier post on the launch, check it out here.
As part of the launch, customers can sign up to the Nexergy Ready plan with Energy Locals. This provides customers with Energy Locals’ great rates, locked in until July 2018 whilst preparing them for our launch of local energy trading later this year. But Energy Locals aren’t just another electricity retailer — they live and breath their motto “Making energy cheaper, cleaner, fairer”. It’s fortuitous that our values, and those embodied by Energy Locals are in such strong alignment because our mission at Nexergy is to “enable thriving communities with clean, accessible energy”.
Those values were established very early in our genesis. The second reason last month was momentous for Nexergy is that it marks one year since Nexergy’s co-founders, Grant and myself (Darius) met. When we met, we quickly bonded over our desire to see a more equitable, reliable and economically efficient energy system and we were lucky to have the opportunity to channel those values via the concept of local energy trading to an early product through the Energy XO accelerator program run through Sydney-based incubator, Pollenizer.
It’s been a particularly interesting time for the energy sector, with the state-wide blackout in South Australia last year occurring just minutes before the end of our second board meeting.
And it’s been a particularly interesting time for the energy sector, with the state-wide blackout in South Australia last year occurring just minutes before the end of our second board meeting. That sparked a comprehensive review into the security of the National Electricity Market (NEM) by Australia’s Chief Scientist, Dr Alan Finkel, to which Nexergy provided a submission and contributed to the review at a roundtable in Canberra in March.
The blackout, the review it prompted, and soaring electricity prices have launched energy into the limelight for the past year. The causes of those soaring electricity prices are under heavy debate with price hikes being attributed by some to network gold-plating, by others to the uptake of renewables, by yet others to the high price of domestic gas, and by a subset of these, to retail price gouging. Indeed, the latter was found by The Grattan Institute in their March report Price shock: Is the retail electricity market failing consumers? to be a large part of the increase of retail electricity prices. And the price hikes continue with FY18 prices up almost 20% for some retailers, although this is also a reflection of higher wholesale prices.
This confusion serves to fuel the fire that is rooftop solar uptake here in Australia, with almost half a gigawatt of rooftop solar installed in the first half of 2017 alone.
And all of this serves to fuel the fire that is rooftop solar uptake here in Australia, with almost half a gigawatt of rooftop solar installed in the first half of 2017 alone. That brings our aggregate rooftop solar capacity to almost 6GW — significantly more than all of the Snowy Hydro Scheme combined. That’s a lot of capacity! And research shows more than 80% of those households with solar are looking at battery storage, which is one reason why Bloomberg New Energy Finance is forecasting 45% of Australia’s energy capacity is going to be in the form of behind-the-meter resources like solar and batteries. That puts Australia on track to be the most decentralised energy market in the world by a significant margin.
So we need an economical and effective means of engaging all of those resources. There are many value streams available from distributed energy resources and right now most of them are not being captured. That’s why we focused in on local energy trading as the most effective means of aggregating and orchestrating those resources early on in our journey at Pollenizer. It will drive lower prices for consumers, fairer returns for prosumers, greater flexibility for utilities and higher levels of clean energy generation over time.
To get there we need more than just innovative technology. We need stable policy and good regulation, something I wrote about recently. And collectively we’re making some inroads in this regard, with our energy rule making body, the AEMC currently investigating distribution level market models. Other bodies and groups are also working hard on various updates required to facilitate innovation. But political in-fighting continues to stifle investment and confuse markets, so change is slow.
Graduating from Pollenizer early this year, we reviewed our company direction to ensure we were staying true to our values. Grant wrote about maintaining our values as core to our our business back in March as part of the NewCo session we ran as a company with purpose.
I think purpose is particularly topical in the current paradigm of large industry disruption and democratisation. We’ve seen it happen with the consumer-led, technology facilitated toppling of the taxi industry by Uber (and others), and the hotel industry by AirBNB. Uber deserves a special mention because doubt in their company purpose has spread fast, and direct from the C-suite, with CEO Travis Kalanick resigning last month amidst a flurry of controversial decisions, arguably revealing a faltering purpose.
There’s an important lesson in this story because, for us, our purpose is baked into Nexergy’s mission. It’s one of the reasons we’re on track to achieve B-corp status as soon as we’re eligible and what guides all of our decisions. Our values also helped us find Nexergy’s resident Hacker-in-Chief, Stephen Muss, who joined us on our journey in May.
There’s an important lesson in this story because, for us, our purpose is baked into Nexergy’s mission.
So, looking back on Nexergy’s first year, we couldn’t be prouder. We’re working to deliver more of the value of clean electricity to consumers whilst building a values-based and purpose driven business. Thanks to our great team here at Nexergy, our awesome partners, and our tireless supporters. We’re looking forward to the year ahead, and many more to come.
Posted by Darius Salgo, CEO of Nexergy.
Want to get a better return for the energy generated by your solar and/or batteries? Or just want to pay less to get your energy from clean local sources? Sign up for the preview release of the Nexergy local energy trading platform.