2013 a year in review
contents 03 Interview with CEO 05 Overview of Retail 07 Overview of Generation 09 Championing Energy Entrepreneurs 11 A Brighter Tomorrow
a year in review
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Interview with CEO
embracing the challenge With the UK electricity industry undergoing its biggest change for a generation, Chief Executive Robert Groves discusses the challenges and opportunities ahead for SmartestEnergy and its customers.
How do you see SmartestEnergy’s position in the UK electricity sector? Our performance over the past year has confirmed the strong, niche position which SmartestEnergy has established during more than a decade in the market. Sustained growth in both our generation and retail portfolios against a difficult economic backdrop in the UK has highlighted the underlying strengths of the business. Our generation capacity continues to build scale and our supply business is attracting a growing number of major UK energy users as it sets new standards in customer service and innovation. What will Electricity Market Reform (EMR) mean to SmartestEnergy? We are broadly positive about the proposals and see reform as an opportunity to develop new products and services. Our flexibility as a smaller participant in a sector dominated by major utilities means we are well placed to gain first mover advantage as the market develops. Given our position in the market we have sought to play an active role in the debate over EMR, highlighting the important role new entrants can play in stimulating competition and promoting innovation.
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Interview with CEO
How is the energy landscape changing for those SmartestEnergy works with?
How is SmartestEnergy reacting to the changing demands of the market?
Rising prices, security of supply issues and environmental concerns are leading to a significant shift in how energy is generated and consumed.
We thrive on change and continually look to adapt and to improve our products and services. We believe generators, energy users and consultants will increasingly demand better levels of service, more flexibility and more choice - all areas SmartestEnergy excels in.
“ We thrive on change and continually look to adapt and to improve our products and services.� This year we began implementing a Businesses and organisations are increasingly seeing themselves not just as users of electricity but potential generators. Many large energy users are also looking at contracting directly with generators, a development which offers significant benefits for both parties and where SmartestEnergy’s knowledge and experience means we are very well positioned to add value. We will continue to strive to help our customers to make the most of the opportunities as the market develops.
number of changes to our business with a focus on accelerating new product development and ensuring the right levels of support are in place to maintain our industry-leading customer satisfaction levels. Specialist account management teams have been established to reflect the complex needs of large customers, and a new Channel team is working with TPI partners to further develop innovative products and services.
Robert Groves Chief Executive Officer
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Retail
smarter thinking in retail Our focus on a better approach to doing business has contributed to further substantial growth and our customer satisfaction once again being named best in the industry. Despite the fiercely competitive nature of the sector, total volumes supplied increased by 14% to 4.8TWh with customer numbers increasing by 23% to 629 as a growing number of major names joined our supply portfolio. The number of sites supplied increased by 59% to over 4080 and rising demand from large energy users for renewable power saw the number of customers with a renewable supply increase by nearly 40% to 334.
Our position as a flexible, niche supplier has enabled us to continue to take an innovative approach to the market. We have continued to expand portfolio arrangements developed with a number of leading consultants, enabling them to benefit from administration savings and their smaller customers to access flexible products normally restricted to larger energy users.
Our investment in customer service was rewarded with the top customer satisfaction ranking in the Datamonitor Major Energy Users Survey for 2012, the third year running we were awarded first place.
a year in review
Figures quoted correct on 31st October 2013
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Retail
A number of major new customers have either come on supply or renewed existing contracts including Associated British Foods, Dow Chemicals and Toyota Motor Manufacturing (UK) Ltd.
Total volume supplied increased by 14% with customer numbers increasing by 23%. We recently signed our biggest contract to date with the John Lewis Partnership to supply more than 380 of its sites with 100% renewable electricity. The contract represented a real vote of confidence in our abilities as an independent supplier to meet the energy needs of one of the UK’s most respected high street names.
a year in review
Figures quoted correct on 31st October 2013
We have also continued to leverage our extensive experience in power purchase to help customers secure long term supply deals and support independent generators under Linked Supply arrangements. Customers include leading manufacturing group Saint-Gobain which has Power Purchase Agreements in place with three anaerobic digestion plant operators. This year has also seen us expand into the Non-Half Hourly (NHH) electricity supply market. We can now supply a customer’s whole portfolio and they are able to deal with a single point of contact, regardless of how many sites they have or what type of supply they are on. Early demand has seen the NHH portfolio grow to more than 900 sites. Our renewable strength was further confirmed during the year by publication of our Fuel Mix Disclosure which showed 45.2% of our total supply came from renewable generation – an increase of more than 15% on last year and four times the UK average of 11.3%.
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Generation
generation forges ahead Significant growth in our portfolio has further cemented our position as the leading purchaser of electricity from the independent generation sector.
a year in review
Figures quoted correct on 31st October 2013
During the past year the number of businesses, landowners and communities from which we purchase electricity from rose by 20% to 259 customers. Continued progress has helped us recently reach the milestone of 2GW of operational generation capacity, enough to power the equivalent of around 1 million homes. Renewable generation capacity expanded by 24% to more than 1.3 GW, making up around 10% of all renewable capacity in Great Britain and almost a third of the distribution connected renewable independent sector. Technologies such as wind and solar delivered some of the strongest increases.
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Generation
New customers have included independent energy company Low Carbon which signed a 15 year Power Purchase Agreement (PPA) covering some 65MW of capacity including four groundbased solar projects in Dorset, Devon and the Isle of Wight.
T he number of businesses, landowners and communities from which we purchase electricity from rose by 20%. We have also extended our existing relationship with Islington Council through a PPA to buy excess electricity from a CHP (Combined Heat and Power) plant which supplies an innovative district heating scheme.
a year in review
Figures quoted correct on 31st October 2013
The council’s Bunhill Heat and Power network benefits more than 700 homes and a leisure centre in the borough. Plans were recently unveiled to expand the scheme by capturing waste heat from London Underground tunnels. We also recently signed an agreement with the £10.5m Greenside Wind Energy project in Scotland, one of the UK’s largest farmbased wind power projects where more than 20 local shareholders have invested in the scheme. As well as working with an increasing number of commercial generators, we have continued to help many communities reap the economic benefits of producing their own energy.
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Energy Entrepreneurs
championing energy entrepreneurs SmartestEnergy launched the Energy Entrepreneurs report this year to provide unique insight into the independent renewable generation sector. The report detailed for the first time ever the scale of the contribution being made by commercial-scale projects developed by businesses, communities, farmers and developers and identified trends in technologies, ownership and location.
The report also provided a platform for SmartestEnergy to highlight key issues for the independent generation sector with politicians and policymakers at a crucial time for the energy industry.
The research involved obtaining and analysing data on more than 2,000 individual projects. The Energy Entrepreneurs report attracted significant media coverage including national, trade and local publications. An engaging infographic stimulated interest across a wide audience and more than 400 copies of the report were downloaded by industry stakeholders. Key organisations including the Renewable Energy Association, Scottish Renewables and Triodos Bank shared the report with their own membership and audiences.
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Energy Entrepreneurs
Rising power of private generation
The Times
Business now generating te ÂŁ80m of onsi renewable energy a year Business Green
Cornwall second in UK for renewable energy
Cornish Guardian
Onsite w o n s e l b a w e ren worth almost ÂŁ40m a year rer The Manufactu
a year in review
Figures quoted correct on 31st October 2013
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Future
2014 a brighter tomorrow As the UK embarks on a new energy era, SmartestEnergy is well-placed to help those we work with make the most of change.
Our success in building a business on the back of the opportunities arising from deregulation of the market more than a decade ago demonstrated how upheaval can bring benefits in terms of product innovation and better service standards. The changes being introduced under Electricity Market Reform are arguably even more significant and the reshaping of our business this year has been aimed at ensuring we are able to respond effectively. The price and volatility of energy will also undoubtedly continue to pose challenges in the years ahead. Against that backdrop, we have sharpened our focus on helping customers better manage their energy costs and risks. With rapid growth being seen across the business, a strengthening of our teams across sales, customer support and operations will ensure we maintain the industry-leading levels of customer service we have built our reputation on. Like the customers we work with, we regard ourselves very much as energy entrepreneurs and are always looking to the opportunity ahead.
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contact details tel: 020 7448 0900 www.smartestenergy.com