Australia’s established electricity retailers face a new competitor – a UK firm backed by Japanese conglomerate Mitsubishi Corp and which specialises in solar, battery and electric vehicle charging options, and sees a future decarbonised grid.
Ovo Energy, which was launched in the UK 10 years ago, and has built up a customer base of 1.5 million, has applied for a retail licence in Australia, and plans to launch in all states, with the exception of Victoria, Tasmania and West Australia. It hopes to launch next month.
The company has made its name from its focus on EV technology, smart meters and solar and batteries, and earlier this week revealed it was in talks to buy the energy retail business of SSE, the second biggest utility in the UK.
That is a deal that would make Ovo the second biggest retailer in the UK, with 7 million customers and a formidable platform to challenge the incumbents in Australia.
The company brought in Mitsubishi as a 20 per cent shareholder earlier this year for the specific purpose of underwriting expansion in new markets, such as Australia.
And it appears to be well advanced on Australian utilities in designing a business model for a smart, clean and distributed future. And its success against the incumbents in the UK suggests it will be a serious threat, and not seek only a niche share.
In April this year, it launched a 6kW Vehicle-to-Grid (V2G) charger that it says is the world’s first domestic bi-directional charger, and can be combined with household battery storage, and storage heaters, adding to savings for the household and a new resource for the grid.
It also launched its own 7kW EV smart charger, a home battery, a load switch on electric heaters, and a control system to operate all those functions together or individually and interact with the grid and respond to its signals.
“This is the first step in building the distributed energy system of the future. One that is truly customer centric and built around households and their connected energy storage devices,” founder and CEO Stephen Fitzpatrick said at the time.
“Renewable energy and electric vehicles are perfect partners for the 21st Century. We’re enabling thousands of EV batteries to help balance the grid in times of peak demand, more renewable energy to come onto the system, and households to reduce their electricity bills.
“Our completely new approach to energy has been made possible by the convergence of emerging technologies, applying intelligence, and years of working with customers to redesign the entire energy system.”
Fitzpatrick says transitioning away from fossil fuels is the biggest challenge of the 21st Century. And while the costs of EVs, battery storage and wind and solar power had fallen dramatically, it was becoming increasingly complex to integrate them onto the grid.
“To succeed, we will need to develop new technology and redesign the energy system around the customer. We want to be at the forefront of that global, tech-enabled transition to a zero carbon energy system. This investment from Mitsubishi Corporation will help us get there.”
Ovo’s operations in Australia are being led by Mark Yemm, who has been working with its parent company since it was founded in 2009. Yemm heads a team of nine people, that is likely to grow rapidly once the licence is approved.
In Australia, its focus will be on the residential market, where it says it will offer greater transparency and simplicity, and more digital tools to manage their accounts. It plans to tackle one state at a time, but it doesn’t indicate where it will start first.