ARENA-backed energy retailer goes into administration as price surge causes havoc

An innovative energy retailer focusing on energy efficiency for backyard swimming pools, and backed by the Australian Renewable Energy Agency, has been forced into administration by the soaring wholesale electricity prices.

Pooled Energy on Friday appointed Glenn Livingstone and Scott Pascoe from WLP Restructuring as administrators, according to an ASIC document.

It did not explain the reasons, but RenewEconomy understands that the business was unable to continue operations given the high wholesale electricity prices, which have risen 10-fold in recent months due to the soaring gas and coal prices, and coal plant shut-downs.

Many other small retailers are at risk. Last week, NSW based Weston Energy lost its gas-retailing licence after being put in what managing director Garbis Simonian reportedly called an “untenable” position by the soaring wholesale prices.

Pooled Energy was awarded a $2.5 million grant by ARENA in 2018 for a $5 million project that combined energy retailing with automation for pool pumps, designed to operate when wind and solar pushed the prices low.

According to a 2018 article in the AFR, the company was founded by WorleyParsons founder John Grill, Keating adviser and venture capitalist John Riedl and retired Honeywell veteran Greg Irving, who had developed power automation and alternative pool chemistry.

The article said a total of $15 million was raised, including the ARENA grant.

The push into pool automation is part of a broad focus on controlled loads and demand response that enables the demand side of the equation to be flexible, given that with increased wind and solar, the supply will be variable.

Australia has more than 1.4 million residential pools, and if all were turned on at the same time would consume a massive 2.1GW of energy. That’s more than most coal fired power stations.

“The objective of the project is to improve energy efficiency at the pools sufficiently to retire one power station and then manage the remaining electrical load as a way of off-loading and stabilising the Grid,” ARENA said at the time.

“For the individual pool owner, Pooled Energy typically reduces the ~40% of total household power used by the pool to about 10%, reduces chemicals up to 80% and delivers a much higher quality, healthier and more reliable automatic pool as part of a package of services.

“The system eliminates the need for a regular pool technician, thereby saving further cost.”

The $5 million demonstration project was designed to trial up to 5,000 pools, and by May 2021 Pooled Energy said it had more than 2,000 household systems with a combined load of 2.5MW, a discretionary load of 1MW and it had participated in 856 events where it reduced load.

It’s not clear if the company reached what it described as a critical mass of at 5,000 pools.

It’s business model, however, was based on “infrequent” excursions of prices to around $300/MWh. But the surge in prices in most state grids has seen wholesale prices average around $300/MWh in NSW, where it is based, and more than $186/MWh in April.

ARENA has been contacted for comment.