Tech giants enter power wars

Apple Energy LLC has been set up, after it identified friction in the market when it comes to custoemrs getting good deals from electricity companies.

EXCLUSIVE

THE revolution that recast music and video retailing is coming to electricity, the national advocate for power consumers says.

Incumbents’ lack of innovation and disregard for customer needs has created an opportunity in the market for the likes of Apple, Google and even Telstra, Energy Consumers Australia CEO Rosemary Sinclair said.

The ECA — set up last year by the federal, state and territory governments to be the people’s voice on power — has run first-of-its-type research which shows a “worryingly high number” of households believe there is no alternative to their current provider and that even if there was, switching is too hard.

Ms Sinclair likened the situation to that the music consumers faced prior to Apple iTunes. The music industry had a business model that wasn’t what consumers wanted but didn’t want to change. So it was changed for them. Ditto the video industry.

Ms Sinclair said Apple, Google, Telstra and others had “identified that there is friction in the market and that they can start addressing consumers’ needs”.

“They come in with innovation that is centred around consumers’ needs and that is the major thing they do that changes the culture of the entire industry,” Ms Sinclair said.

Apple Energy LLC was set up by the tech giant only last month. Google meanwhile paid $US3.2 billion ($A4.3 billion) in 2014 for the home energy management business Nest.

Nest Labs has been bought by Google. Nest is set to change the way we manage energy use at home.

Nest Labs has been bought by Google. Nest is set to change the way we manage energy use at home.Source:Supplied

And earlier this year Telstra began exploring how it could add energy to its telephone and internet deals.

Ms Sinclair also cited Mojo Power and Pooled Energy for bringing new approaches to the market. Mojo recently began selling NSW consumers a monthly “EnergyPass” that gives access to wholesale electricity rates while Pooled targets pool owners with a bundled deal of maintenance, chemicals and electricity.

At a clean energy summit in Sydney today Ms Sinclair will publish the full finding of the ECA’s research into consumer views on power.

“This is the most comprehensive study of the attitudes and activity of residential and small business energy consumers ever undertaken in Australia,” Ms Sinclair said.

The survey will be repeated every six months to track levels of satisfaction and confidence levels.

Telstra is also looking at ways it can add energy into its phone and internet deals. Picture: AFP

Telstra is also looking at ways it can add energy into its phone and internet deals. Picture: AFPSource:AFP

In a speech at the same summit the head of the Australian Energy Market Commission will call on the sector to stop its navel-gazing and instead focus on consumers.

“The traditional, centralised energy supply model is being challenged by new products and services, including renewables like wind and solar — but the current debate is inward focused (and) all about the industry,” AEMC chairman John Pierce’s speech notes say.

The debate “should be going beyond renewables — because the change we are seeing in the market is all about consumers — and is all about making sure consumers can make the choices that are best for them so they have greater control over how they manage and use their electricity,” Mr Pierce is due to say.

Meanwhile, more than 60,000 people have now joined the Big Energy Switch which seeks to leverage group-buying might to extract a discounted electricity deal from a major provider.

Go to www.onebigswitch.com.au for more information.

There is no obligation to take up any offer. News Corp Australia and One Big Switch will earn a commission from any accepted deals. News Corp is a shareholder of One Big Switch.

About author

Two banks down, two to go

Video Image Westpac has followed rival NAB by raising its variable mortgage rates for owner-occupiers and investors. A Westpac branch in Sydney. Picture: Hollie Adams/The ...