AGL Energy has offered the latest sign that it is focusing its retail business on what’s happening behind the meter with the announcement that it is partnering with UK outfit Ovo Energy to roll out a digital services platform in Australia.
The collaboration, announced via a joint statement on Monday, gives AGL exclusive access in Australia to Kaluza, Ovo’s advanced “customer experience” and energy flexibility platform, built around smart meters, home solar and batteries, and electric vehicle to grid (V2G) charging technologies.
In return, AGL will invest in Ovo Energy Australia to adapt its platform for Australia, opening up its massive retail customer base to Ovo’s “personalised digital experience,” while also setting itself on a path to regain some of the ground lost through its own stubborn focus on coal.
Ovo made its first steps into Australia two years ago, seeking to disrupt the local market with a focus on battery storage and EVs, but little has been heard of it since it first unveiled plans to seek a retail licence.
AGL has promised an urgent rewrite of its business strategy after announcing a massive loss in the December half. CEO Brett Redman conceded in February that the company had been banking on a slower transition to “behind the meter” technologies, but that the speed of change now required a new strategy.
That strategy, due to be announced by AGL on Tuesday, could involve a potential demerger of the generation and retail sides of the business, as RenewEconomy contributor David Leitch has suggested – an option Redman has not ruled out.
In a statement on Monday, Redman said that customer demand was central to the market forces that shaped the company’s strategy and that the collaboration with Ovo would help AGL ensure its customers had choice and flexibility.
“At AGL, we believe that the future of energy in Australia will be smart and affordable and we are committed to playing a leading role in developing a pathway to a modern decarbonised energy system,” Redman said.
“Our agreement with Ovo represents an exciting opportunity to work together to meet that objective, exploring the right innovative systems to meet future demand and digitising the customer experience.”
Ovo has built up a customer base of 1.5 million since launching in the UK 10 years ago and in 2019 brought in Japanese giant Mitsubishi Corp as a 20% shareholder to help underwrite its expansion into new markets, including Australia where it has been offering retail services since late in that year.
In Europe the company has been pitted against Tesla for its similar vision of offering households energy packages that combine solar panels, battery storage and electric vehicle charging services while also coordinating these demand-side resources in a way that is beneficial to the grid.
Late last year, Ovo partnered with a Royal Dutch Shell subsidiary to offer rooftop solar and batteries to homes in Spain and in its home market of the UK it is carrying out a home battery trial in partnership with Sonnen.
Tesla, meanwhile, launched its own residential energy offer in the UK in October of 2020, in partnership with local retailer Octopus Energy, available only to customers with smart meters, rooftop solar and one or more of the US company’s Powerwall 2 batteries. In Australia, Octopus has partnered with Origin Energy, in a similar arrangement to AGL and Ovo.
“While the shift to renewables is driving decarbonisation of the power sector, the hard work of tackling carbon emissions in the rest of the economy, in particular the residential sector, is just beginning,” said Ovo founder and CEO Stephen Fitzpatrick on Monday.
“Ultimately, success will come down to turning consumers into willing, active participants in the energy transition. Companies must now focus on building trust with their customers, harnessing technology that makes zero carbon living simple and affordable for everyone.
“We are proud to be working with AGL, a true household name in Australia, to bring the power of our technology to a market that is at the forefront of the zero carbon revolution.”