TALKING NEW ENERGY

[00:00:04.730] - Jon

Welcome to Talking New Energy, a podcast from Delta-EE, the new energy experts. We'll be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.

[00:00:21.550] - Jon

Hello, and welcome to the episode. One of the key differences between old energy and new energy is where capital investments are taking place. In old energy, capital investments were focused really on power plants, networks, in big assets, nearly all on the utility side of the meter. However, in new energy, a significant part of these capital investments will be focused on the customer side of the meter, in distributed assets, heat pumps, batteries, PV panels, big energy efficiency refurbishments. So I think of it that the energy system is being recapitalized, in part in assets in customer's homes, businesses and industrial sites.

[00:01:10.030] - Jon

And today I'm talking with my Delta-EE colleague and expert in this area, Nigel Timperley, to explore how capital investment is starting to flow into these types of assets. Is it flowing? Will it flow? In what ways will the finance be there to finance a downstream energy transition? So hello, Nigel. Welcome to the episode.

[00:01:35.230] - Nigel

Hello, Jon. It's a pleasure to be here. Thanks very much.

[00:01:40.270] - Jon

Nigel. You've been looking at this area and for our listeners, if you had to identify a single takeaway or how you feel about it in terms of financing distributed energy, new energy, the downstream energy transition, what would be your one takeaway?

[00:02:00.250] - Nigel

My one takeaway would probably be that. First of all, it's a growing area. This is a huge growth area for investors of all types - large-scale corporate investment and the small scale investor as well, the private investor with retail money. I would say that there are several types of investment vehicle are emerging to suit different risk appetites and to suit different project types as well. Certain types of investment would be more suited to a very large project and some to very small. So we've got these different vehicles appearing, though in all cases, there's only a few examples of those vehicles.

[00:02:51.630] - Nigel

So the vehicles are maturing. What we haven't got is lots of examples of each of those vehicles, if you see what I mean.

[00:02:59.670] - Jon

Yeah. Okay. My impression, then, is that there's probably more money looking to find a home than there are homes at the moment. So it's a bit of a cliche. But I think of this wall of money and then the different vehicles that you just talked about, they're ways for that money to find a home. But my sense is there's more money than homes at the moment. I don't know if you agree with that.

[00:03:27.950] - Nigel

Yeah. That was definitely borne out by our research across all vehicle types. There's a lot of money looking to get in, and it's partly helped, of course, by the fact we're living in a low yield world so that there's a lot of money, that's parked who wants to park the money at the bank earning negative interest. In real terms.

[00:03:56.070] - Jon

There's a lot of money looking for a home in general, in the whole finance sector. But a lot of that is now pointed towards your energy transition in this downstream world.

[00:04:07.530] - Nigel

Absolutely. And there's an awful lot of reasons for that. One of the big macro trends that's driving this is the rise of ESG investing enormous numbers of funds. We're talking about a four figure number of investment funds in the last couple of years. Rebranding themselves as ESG, environmental, social and governance factors are now taken into account what ESG stands for now. It's very easy to be jaded and say, how many of those rebrands are just greenwash. So it's really the same fund underneath. But the mere fact that those companies are doing that rebrand suggests that their customers are demanding a broader set of investment factors are taken into account, including environmental funds.

[00:05:02.010] - Jon

Well, let's bring it to life a bit.

[00:05:05.190] - Nigel

Well, I was just going to say we're also seeing quite a lot of funds that are attracting money where the retail price of those funds is in excess of the underlying value of the assets. There's a premium there. People are paying a premium to get into these funds, which is objective evidence that they're for the wall of money thesis.

[00:05:28.050] - Jon

Yeah. Okay. So good to get into some of these funds early, then I guess? Let's bring life a bit. Do you want to pick out an example or two for our listeners of a vehicle that's enabling this wall of money to flow into the customer side of the meter or downstream energy transition?

[00:05:54.030] - Nigel

Well, we've identified a number of different vehicles, both from traditional finance, such as bank debt and bond schemes, right up to some more adventurous venture capital schemes. And as I said, there are different horses for different courses. But if we pick out one example, perhaps of a lower risk model, traditional tends to be a synonym for lower risk. If you look at something like Urban Vault who are an Irish company, their whole model is essentially a finance model. So what these guys do is they go into their B2B customers.

[00:06:37.350] - Nigel

They replace their lighting with energy efficient Led lighting, which give very predictable energy efficiency savings. And then they also talk to them about whether they can plaster the roof of the factory or the warehouse with solar panels, and then typically agree a PPA, a power purchase agreement with the client, which gives them where the client typically just buys the power and signs up to a power deal, maybe 20 years that they'll sign on to that power. So it's effectively a bilateral deal between Urban Vault and that company to provide supply power.

[00:07:20.330] - Nigel

That power may be even at a lower cost than grid power. So from the client's point of view, it's a complete no brainer. From Urban Vault's point of view. It means they've got a guaranteed return and they can go to their investors and pay secure funds against that and then pay a return on that investment. So essentially, it looks like a bond. If you put it into traditional finance terms, the investor there is typically something like an investment bank or finance institution would lend a lot of money to Urban Vault, and then in return, they would get a coupon, which is an interest on that lent money.

[00:08:05.730] - Nigel

And that yield might be quite modest, but it would typically be more than is available in the traditional bond marketplace, where yields are currently extremely low. When I talked to Urban Vault’s Chief executive, he actually said the most important thing for them was not the technology. It was actually the financial back end. It was nailing down that secure source of bond funding - that was more important than all of their installation expertise or anything. That was a real key part of what made them very good at what they do.

[00:08:44.370] - Jon

The LED is quite straightforward. No technical risk, the solar panels relatively straightforward, no technical risk. I don't want to use words financial engineering, necessarily, because that has some negative connotations among certain people. But enabling the customer to get some of the benefit of that without any capital cost and then enabling the capital providers to get what they want, which is a steady, safe return.

[00:09:14.650] - Nigel

Yes, but already in that, you start to see an interesting idea, which is that that's not just about the money. It's about the predictability of the returns. It's a low risk investment. So that isn't going to work for some breakthrough fuel cell project, a moonshot or a type technology. It only works for certain types of very proven technology that give very steady, predictable returns. And so we start to see how the space is evolving. Different vehicles work for different types of project.

[00:09:54.070] - Jon

And I guess that project, the steadiness of those returns depends on whether that customer, the factory, the office building, whatever it is, is going to be there for another ten years. The risk around that host site and that customer, these factors will all come into an assessment of how safe those returns are.

[00:10:15.130] - Nigel

Yes, but that doesn't mean a riskier play cannot work at all at any price. With a bond style scheme, it just means that the source of the funds will probably want a higher return if they're taking on a bit more risk. So it will go slightly up the food chains. If you look at example, like Bundles in the Netherlands, they've issued what are essentially bonds over a term of say, I think their laundry one - basically essentially what you do is you're lending money to provide laundry services where the customer pays as they go for a laundry service.

[00:10:54.100] - Nigel

They don't pay for the washing machine. They paid for washing, not the machine itself, but somebody's got to pay for that washing machine on the floor, right. So their bond funds that. But of course, that's riskier. Okay. You've got an appliance sitting in somebody's home. Goodness knows what could happen to that. But it's out of customer sight. Therefore, those bonds typically pay 5.5% over, I think they're five years rather than the kind of returns that Urban Vault are paying, which I don't know exactly what they are, but they're less than that.

[00:11:32.570] - Nigel

So, again, typical bond model, you would expect a higher return, the more risk you take on as a lender.

[00:11:42.070] - Jon

And when you talk to companies like not speaking specifics. But companies like Urban Vault like Bundles with these sorts of models, do they have trouble raising money, or do they have trouble structuring deals that are attractive to investors? Or is that not a challenge to them?

[00:12:02.350] - Nigel

I think it depends who they're raising the money from. So it can be difficult. Urban Vault is run by three ex investment bankers, so they're very well connected individuals. And I think it's three. I'm saying that off the top my head. But these guys are essentially from a finance background, not from a technical new energy background. So that gives them those connections, which is easier. But even then, they had to work very hard to make that work. Bundles - their audience is the retail investor. Many of the same people who are paying for their laundry service will be the same people who are actually buying, who are investing because that tends to be very small amounts of money.

[00:12:50.030] - Nigel

Yes, it's quite a virtuous circle. They're buying into a concept of a circular economy, and they're becoming part of that circular economy, and you start to move there into a separate vehicle, which we're also interested in, which is crowdfunding. Okay. So crowdfunding tends to come with slightly different drivers, whereas something like Urban Vaults model, essentially, it's a banking driven model, if you like. So it's pure finance play with some CSR value. The Bundles model is very much appealing to people who believe in the new energy future.

[00:13:33.500] - Nigel

And in the circular economy, they want to be part of a whole new world. So there's an emotional benefit there to the investor in addition to the financial benefit.

[00:13:53.290] - Jon

We’ve seen some examples of that in crowdfunding in energy communities and topics like that where people are clubbing together to build a local wind turbine or to build solar panels in their community and to benefit from that. And they're investing that as well, I guess.

[00:14:09.110] - Nigel

Yeah. These things tended to start off. That's right. Community scale works really well for crowdfunding. It works well for quite modest sized projects in terms of investment, maybe up to a few million Euros. But you're starting to see as well some companies people start to realise. Well, actually, we can copy and paste that model. So you've got people like an Energie Partagee, which is a French social enterprise that goes around France, effectively seeding these community projects across the country. So rather than just being a one off in one particularly energetic community and then it doesn't go anywhere else.

[00:14:47.170] - Nigel

Energie Partagee are saying, OK, we've learned how to do this in Community A. Let's copy and paste that model to community B. So each one has their own local character, their own local terms and conditions and so on. But it starts to be a bit more scalable because of the way they approached it. I'm not aware of anybody other than Energie Partagee taking that sort of copy and paste approach. It's quite an innovative idea, and I think it could work in other European countries, so its one to take a closer look at.

[00:15:18.170] - Jon

So we talked about that first route is maybe traditional investment bank finance or people with large, managing large amounts of capital looking for a steady return. The crowdfunding model. My guess is some of our listers may be thinking crowdfunding. Yeah, quite cute, quite nice. But is that really scalable? If we look at the energy transition, we're going to need trillions invested on the customer side of the meter. Can crowdfunding make a dent into that level of investment that we need? What's your thoughts on that?

[00:15:59.730] - Nigel

As I said, there are sites. There are companies that will allow you to crowdfund one PV project after another at community scale. But you're right. There are clearly limits and it's very much part of our analysis. Our findings, are there are different fund types, work for different kinds of projects, so there are certain characteristics to crowdfunding. It tends to be quite conservative with a small c. Community projects are great. If I'm very invested in my community, I mean emotionally as well as financially. I care about having a PV array at my local primary school, but it's probably not the right source of funds for some innovative technology project.

[00:16:47.790] - Nigel

Say, in the hydrogen space that may happen or may not. And some of the more adventurous projects, as the adjectives suggest, are attracting venture capital. And venture capital has definitely discovered new energy after a slow start. And that's where I see the really big numbers. That's where we see the really big numbers coming in. Because venture capital isn't interested in putting PV on your local primary school. It's interested in a massive exit from €100 million type projects potentially not always od that size. Some of them go to low millions, but they're looking for the very big numbers.

[00:17:28.530] - Nigel

So we'd see different players entering that space. I think that's what we are seeing. In fact.

[00:17:35.070] - Jon

Another category is investment trusts. So there's been quite a few investment trusts being established around financing clean energy efficiency on the customer side of the metre. Can you help our listeners understand how these investments trusts are structured and what you're seeing in this space?

[00:17:57.750] - Nigel

These are particularly popular in the UK. Also, we see them in Japan, essentially what they are a pot of money set up as a company which in effect any investor can invest in you buy a share in the investment trust and that investment trust then invests in underlying companies. So from the investors point of view, there's an element of risk management because my investment dollar is spread maybe across 20, 30, 40 different investments, and the investment manager in the trust will then typically invest in a specific type of investment.

[00:18:44.610] - Nigel

For instance, we're seeing a lot of energy efficiency investment trusts, so they will take that they'll raise funds and have a big pot of cash, and then they will set off looking for energy efficiency projects that they can invest in, and that will generate a yield. And a lot of these are B2B style projects, again, with fairly predictable returns, though not always. And they often also include some renewables as well. So those two. But we're also seeing some really interesting ones. People starting to invest in projects that essentially are forms of flexibility type trading using batteries, perhaps so that private investors can gain access to some of the returns that TSOs and DSOs may pay for flexibility services.

[00:19:49.150] - Nigel

That's quite an interesting way for the retail investor. The energy transition has tended to mean the very visible stuff like big wind and renewables and so on, very green projects. But now we're starting to see these more technical new energy innovations, which are absolutely vital to the transition. And these trusts give investors that way in. Now, they are definitely higher risk than bond schemes and bank debt, which is just about as low risk as you can get, really. But these tend to involve investing in companies that do certain things or investing in specific projects.

[00:20:31.450] - Nigel

But the portfolio elements de-risks them quite significantly. And there are variants. You've got companies as well, like in the States. If you look at, say, Hannon Armstrong, which is a huge American company trust, it positions itself as a renewable energy efficiency investor. If this is perfected this model, actually, there isn't really an equivalent to Hannon Armstrong in Europe. It fascinates me that nobody's attempting to copy their model, but essentially they issue all sorts of bonds and all sorts of schemes to raise money and then invest in cash generative new energy projects that yield significantly more than you're going to get at the bank.

[00:21:20.710] - Nigel

And then we'll pay that back over time to the customer. Hannon Armstrong, if you look them up on the Dow, I've had a very good run, but there's just such a number of these projects around at the moment that it's possible for investors like that to cherry pick quite attractive projects.

[00:21:44.190] - Jon

I was going to say the fundamental principle is that the projects must have good underlying economics. So the LEDs, we talked about the solar panels on roofs, the energy efficiency projects. They've all got to be underpinned by attractive fundamental economics. That's maybe not the case. The exception would be venture capital where you're taking a risk. So there is riskier money on things that aren't yet profitable but will be profitable in the future. So would you agree that most of the time you've got to have good fundamental economics, or are there other models that are more speculative about investing in things like venture capital that will be profitable in the future?

[00:22:31.870] - Nigel

Yeah. Venture capital is the obvious one that comes to mind. Even more speculative are SPACs, which I cannot remember but - a special purpose acquisition company, and it has a particularly US field, but in fact, it can be done in Europe as well. But essentially what it is is a company without portfolio, if you like. So somebody establishes a company that has no operational business, lists that company on the stock market and then looks for a private, unlisted company that has enormous growth potential and acquires it.

[00:23:14.540] - Nigel

So for that company that's acquired, in effect, it's a very quick way of floating that company because all of the floating going live in the stock market has already been done by the SPAC in advance. It's become very fashionable in the US, but it's very risky a lot depends when you invest in this. You're investing in a business that has no business, right. And you're depending on them making a good choice.

[00:23:58.190] - Jon

You’re almost giving it a mandate to invest your money? Are any of these SPACs in the downstream energy space?

[00:24:01.250] - Nigel

Yeah. We are specifically in EVs. That's really where they've made it, electric vehicles have become a glamour - SPACs very much go with glamour sectors, both in energy and well beyond. But in our new energy space, it's really about it's predominantly EVs, not all. And we are starting to see one or two other ones. But that can be both the EV companies themselves and all the infrastructure around EVs, seen as a huge growth area. So in the US charging networks, absolutely. They become a way of super charging rollouts, because if you've got €100 million sitting in your coffer, you can go and make a landgrab for all the best CPO, all the best charge point locations before somebody else does.

[00:24:53.930] - Nigel

So SPACs have fuelled or certainly one of the things that can fuel that kind of landgrab, if you like, for growing businesses and the numbers involved the whole point of the SPAC is it's a high risk, high reward game. So all the vehicles we've talked about, it's definitely the riskiest, but equally, it's the one that could give you the biggest payback. And it's very much for moonshot projects, as I would say. So, anything that sounds a long shot that could make you very, very wealthy indeed, a SPAC would look at and just to give you an idea, the US SPACs have replace IPOs, the traditional way of floating this year more money made by SPACs than by IPOs in terms of the scale of those floats.

[00:25:50.950] - Jon

Nigel, we've gone through a lot of different vehicles or ways for finance to flow into the downstream energy transition. It's all sounding quite exciting, but it's by no means going to be smooth. Is it or has been smooth. We haven't focused much on the challenges. But if I ask you, how much will this be plain sailing and how much is it going to be a really bumpy road as lessons learned by these different types of vehicles and there'll be mistakes. And I don't know, dotcom bubble type crash.

[00:26:28.930] - Jon

What's your view?

[00:26:32.690] - Nigel

I think all those risks do exist without shadow of a doubt, this greens portfolio. Okay, anybody getting into this has to think broadly. This isn't investment advice. Delta-EE doesn't do investment advice. I think we should say that. But having said that and that is the case. If you look at our new energy business model service, we've been picking companies that we think are interesting new energy companies. We interview them, we write case studies about them. We drill down into what makes their business models exciting. We had a look the other day, something like 40% of the ones on our we've got a very large database getting on for 500 analysed companies, something like 40% of them have attracted investment over the last three or four years, either by total acquisition or by partial investment.

[00:27:28.790] - Nigel

This has become a very attractive area for investors. VCs are excited about it now, with any exciting new space, you always get a bit of overheating and there is a risk of a bubble forming potentially. But I would suggest the sheer scale of the transition. We're a long, long way from bubble territory.

[00:27:50.730] - Jon

Yeah. When we were chatting early in preparation of this, just back of the envelope calculation about just take residential heat pumps across Europe. There's close to around a million of those being installed a year. Compare the premium on a heat pump to a gas or oil boiler that's in the region of £10,000, €10,000 might be five. Might be twelve. Let's call it a ten for around number. So you've got a million times $10,000 a year just for heat pumps in homes in Europe. And that market is going to grow and grow and grow and be a lot bigger than a million.

[00:28:37.850] - Jon

So trillions is a big number and people go, yeah, are you sure? But I think it will require trillions over the next years if we're to get anywhere close to our 2030 targets.

[00:28:55.970] - Nigel

Yes, I'd agree with that. And I think the key is that to attract that kind of number, there have to be returns for the investor. That means, in a way, new energy is about engaging with customers. That's almost in a sense, what new energy is - engaging customers about the transition. Part of that engagement is to help those customers participate in the financial returns as well of new energy. As we saw I mentioned with Bundles, that's one tiny example. But crowd schemes are another one. People are getting emotional benefits from investing in their community, but they're also getting financial returns.

[00:29:36.770] - Nigel

They can see they're greening their community, but it's also paying them a yield. So it's quite a nice democratisation story. Energy in the past has had this fat cat image of a small number of companies getting, doing very well and the rest of us just paying the bills. That's not what new energy looks like in the future. We need to share those benefits with the community as a whole. The community of investors, because that community of investors will very largely be the community of customers, too.

[00:30:11.150] - Jon

So thinking about those heat pumps, some customers will pay up front for their heat pumps. An increasing proportion will pay for the service, and it will be a service provider, an investor that will pay for those heat pumps. Those investors could be, in some people's mind, the fat cats, capitalist financiers. But sitting behind that is often pension funds, where all our money is and sitting behind that could be retail investors who are financing this themselves and make contributing to the energy transition through investors.

[00:30:46.070] - Nigel

Yes, that's right. That's how I see the predominant vehicle for private investors. A lot of these investment funds will be attractive because of these yields. They'll be attractive to pension funds. What a lovely virtuous story, right. Pension funds are about the future. And that's what new energy is all about. People being a yield from investing in their own future and the future of the community. So it's a very positive story. But what I would say is it's one that's not talked about enough. And that's why we're doing this today.

[00:31:19.610] - Nigel

When you say trillions. My back of a packet calculation is low trillions? Yes. So I think that is a valid observation.

[00:31:30.470] - Jon

Well, on that positive note, let's bring out the talking new energy crystal Ball and set the dial to 2026. So coming back to the question at the beginning, there's a wall of money looking for a home in the downstream energy transition. There are some emerging well, more than emerging. There are a number of ways vehicles, investment opportunities connecting this wall of money to the downstream energy transition. But at the moment, there's not enough of those vehicles always existing for all of that money to flow to the opportunities.

[00:32:11.090] - Jon

So by 2026, five years time, will there be enough ways to match that supply of opportunities with that demand from that wall of money looking to invest the money in the downstream energy transition? So what do you think?

[00:32:31.770] - Nigel

Yeah, it's a difficult one that, Jon. No, it seems a bit fuzzy this particular one. My immediate response is we are seeing lots more of these funds appearing a lot more. People are starting to say, hey, there is demand for this. Let's set up a fund. A lot of those funds are oversubscribed when they float and when they are then traded, they often trade at a premium to the underlying value of their assets. So again, that suggests very strongly there's a lot of demand.

[00:33:11.190] - Nigel

The rise in ESG investing also corroborates that story. So I think we're going to see a huge growth in demand. We will see in response to that growth in the number of vehicles. So I think both will go up, but actually, within five years, I still think demand will probably be ahead of the number of vehicles because I think demand will grow immensely ahead of the market's ability to respond. If you said ten to 15 years out, my response might be rather different, but there's so much to do that we are not going to soak up all that demand and all those projects in five years would be my short answer.

[00:33:47.210] - Jon

Yeah. Okay. My take on it is we probably need more people connecting the two worlds of finance and downstream energy. And I love the example of Urban Vault being set up by investment bankers, not by LED specialists or solar specialists. I do see more and more people connecting the two worlds together. I like debate and disagreement sometimes, Nigel, but I think I broadly agree with you that the demand for investment opportunities will probably continue to outstrip the supply. But in a way, that's a good thing for the energy transition, because if the business model is developed that enable the two to come together, then we'll see a lot more distributed energy.

[00:34:42.620] - Jon

We'll see the downstream energy transition accelerated. We'll leave it there. I hope for everyone listening. That was an interesting glimpse into the world of finance and maybe seeded a few ideas about how your work in the energy transition can be connected with the investment, the investors who are looking to get a return for investing in the downstream energy transition. Thanks for listening. We'll explore this topic further in the next week with some other guests. Thanks again, Nigel, and look forward to welcoming you back to the next episode next week.

[00:35:25.570] - Jon

Thanks and goodbye.

[00:35:28.670] - Jon

If you're as passionate about the energy transition as we are. Then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcasts on your chosen podcast platform. If you like the podcast and like sharing, then please do rate us and to listen to archived episodes to read transcripts and to see the latest Delta-EE insights. Then please visit www.delta-ee.com.

[00:00:04.730] - Jon

Welcome to Talking New Energy, a podcast from Delta-EE, the new energy experts. We'll be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.

[00:00:21.610] - Jon

Hello, and welcome to the episode. Hot water is something that's important to every single one of us. Most of you, I guess will have a hot water tank somewhere in your home. And in some ways, a hot water tank is a very straightforward bit of equipment, a well-insulated metal cylinder with some pipes connected to it and maybe a direct electric heating element inside of it as well. But a number of companies are looking at bringing hot water storage into the modern age. And as heating is increasingly electrified, integrating hot water tanks with our electricity system.

[00:00:58.510] - Jon

So to explore this, I'm joined by three guests, a Delta-EE expert, to tell us a bit more about the area, a manufacturer of a new type of hot water tank and an energy company looking to integrate hot water tanks into the energy system. So let's get on and say Hello. First of all, Martin Allman, chief commercial officer at Mixergy. Hello, Martin.

[00:01:19.600] - Martin

Hi, Jon. Thank you.

[00:01:21.620] - Jon

Thanks for joining, Martin. Not all of our listeners will know of Mixergy. I'm sure you want to change that, but in the meantime, can you give our listeners an elevator pitch for Mixergy, please?

[00:01:34.320] - Martin

Yeah, sure. We're best known really for developing smart and connected hot water tanks. And this is all about enabling homeowners to households to live better, to save money on their bills and also to reduce their impact on the environment. There are two key ways that we do this. One is through the technology that we have in the tank itself, and we use thermal stratification, where we heat the tank from the top down to just heat the hot water that you need.

[00:02:06.550] - Jon

Martin, I think of that as charging the tank like a battery. Is that a good analogy, or is that not quite right?

[00:02:13.990] - Martin

Well, yes, I think that is using a hot water tank as a battery is a good analogy. I think the specific point about thermal stratification. If you think about most hot water tanks like a kettle, you put your water and you switch it on and it heats everything, and then you pour the water you need for your cup of tea and all of the heat energy that's left inside the kettle is wasted. Now, a fundamental part of the Mixergy tank is this idea of just heating the water that you need, and you can regulate that by having this smart sensor arrangement so that's the key so that you're not wasting energy or wasting money every time you heat water, you don't need that's a key part of it that gives those efficiencies.

[00:02:59.420] - Martin

It's also about optimising the use of renewables be that solar PV, solar thermal, heat pumps. And then it's the smart connected element to it through the Mixergy platform, which could be about giving greater control to users. And we can see the consumers that demand to have a bit more control about their clients that they have in the house and then do some smart things with machine learning, to use dynamic tariffs to get cheaper electricity off peak periods, and then finally to connect our assets onto the grid, to provide flexibility services to the grid from where we work with Centrica.

[00:03:36.980] - Jon

Great. Thanks, Martin, to give a list as a feel for your size. When were you formed? And what sort of numbers are you selling a year today? Tens hundreds thousands. Tens of thousands?

[00:03:49.640] - Martin

Yeah. So we started training in 2017, so we're still pretty new business. I think we're at that stage where we're really scaling up as a base. We've got 31 people working for mixed here at the moment, and we've got just over two and a half thousand tanks installed pretty much all in the UK currently and growth wise, we're looking for three times growth in tanks sales over this year. That's the sort of trajectory that we're on getting out of the UK as well into some international markets.

[00:04:29.130] - Jon

Great. Thanks, Martin. Coming back to you shortly. My second guest is Stavros Sachinis, vice President of IoT Internet of Things applications at Centrica. Hello, Stavros.

[00:04:41.310] - Stavros

Hello, Jon. Firstly, thanks for having me on the podcast today, especially alongside Martin, who represents a really good partner of ours and fantastic business and product at Mixergy. I head up the demand response and smart energy business and capability under Centrica's Consumer division. For the past kind of three years, we've been adapting our industrial commercial demand response and virtual power plant capability to work with pools of residential devices and smaller devices. And we're now kind of in the process of really scaling this business so effectively. What we do is we connect and we intelligently steer devices such as electric heating, battery storage, charging, et cetera.

[00:05:20.460] - Stavros

We aggregate these devices into large pools and we monetize them through virtual power plants through the providing services to the system operator or through reducing some of the costs in the energy bill for customers. We effectively go to market in two ways. One is we work with partners such as Mixergy, so we integrate with manufacturers, so we provide a technology service and a trading service. And the second way is through our own customer propositions at Centrica. So we're working on some propositions that will be launching through our Hive brand in 2022.

[00:05:55.220] - Stavros

So these two business are quite kind of complementary as well. Both really good opportunities.

[00:06:00.890] - Jon

Okay. Is your activity UK focused or international at the moment?

[00:06:07.430] - Stavros

International actually, we're working with around a dozen partners currently in the UK and Ireland, Belgium and Netherlands. But we also operate virtual power plants in North America and Japan. So we've got quite an international focus. Our Centrica consumer businesses are UK and Ireland. So really the UK and Europe are quite a good market to kind of get this off the ground. And that's our focus at the moment.

[00:06:33.690] - Jon

Okay. And I don't need to ask you when Centrica was formed because you're a much older company than Mixergy. But in terms of scale, similar question, Martin, can you give our listeners a feel for the scale of your residential demand response?

[00:06:47.090] - Stavros

So we've got about a dozen partners. We're in the scale up mode at the moment. Mixergy were actually our very first partner. We went live in 2019 with a pool of Mixergy and tanks in National Grid's dynamic firm frequency response market. We've scaled up. We've got over 1000 tanks on the platform now over 1000 tanks participating. And I thought I'd dropped some nice news to Martin today that we've just hit the three megawatt milestone, which is kind of really nice. I remember the first tank. I remember the first megawatt and I turned around.

[00:07:20.070] - Stavros

We had two and then today we have three. So the snowballs kind of started. We're also launching, as we speak in Belgium with our battery and electric heating partners. So kind of watch this space. We've been working a lot in the background, but we're starting to grow site to scale. So some really nice progress.

[00:07:39.090] - Jon

And I know when we've looked at the capacity of if you could get all hot water tanks connected and use the electric heating element and then you're talking many, many gigawatts. So the potential is vast. And it's great to hear that progress that you're making.

[00:07:55.510] - Stavros

Yeah. I think grid operators are suggesting that in the UK, 23 million homes by 2050 will install low carbon heating. If a quarter of those had a Mixergy tank, you're talking as much as 15 gigawatt of flexible capacity, right. That's equivalent to the offshore wind capacity in the UK. So there is huge potential in this space. We've been working a while to kind of get this off the ground, but I think the time is now this market is starting to take shape.

[00:08:26.070] - Jon

Okay. Thanks, Stavros. So my third guest is Klara Ottosson, my Delta-EE colleague, an expert in this area. Hello, Klara.

[00:08:33.690] - Klara

Hi, Jon.

[00:08:35.130] - Jon

So, Klara, can you help our listeners contextualise what we're hearing from Martin and Stavros in terms of the overall space focus today on Mixergy’s product. But is that the only product or is there lots of activity in this space?

[00:08:52.110] - Klara

Right. So smart hot water tanks is quite a small but emerging market, but we are seeing other products as well as Mixergy’s emerging. So, for example, retrofitting smart controls to regular water cylinders to make them smart, which is something that Eneco are doing in the Netherlands and Climote is doing in the UK and Ireland, for example.

[00:09:16.530] - Jon

Are they providing that balance of direct benefits to customers or benefits to the electricity system or both?

[00:09:24.390] - Klara

So it's actually both Eneco, for example, adjust when hot water is electrically heated for the benefit of its trading position in the wholesale market, and then balancing this with heating up the right amount of water at the right time for the customers. But Climote are enabling the customer to easily see how much hot water they have in their tank and can cover that electric emergency heater with sorry time of use tariffs.

[00:09:53.550] - Jon

Okay. And beyond hot water tanks themselves, other interesting things in this area of hot water or thermal storage.

[00:10:02.860] - Klara

So I mean, there are obviously electric storage heaters night storage heaters that charge up overnight and then discharge the heat during the day. And there are also more modern products with that giving better controls and better experiences to the household.

[00:10:17.850] - Jon

Okay. So that's not so much new that's an existing small but significant market storage users.

[00:10:22.810] - Klara

Yeah. Exactly. But then we're also seeing other types of thermal storage products coming to market, including heat batteries that use phase-change materials and thermal storage boilers. And the characteristics that they share is enabling that time the time of heat production to be shifted from the time that heat is needed and thereby reducing the peak loads on the electricity system. But then there's also obviously using the thermal inertia of buildings and other non household forms of thermal storage.

[00:10:55.630] - Jon

Okay. So it's quite a wide area, and I think an emerging area, as we've heard so far from Martin and Stavros. Thanks, Klara. That's really great context. Let's get back to Mixergy and Stavros what you're doing from Centrica’s perspective. So I think of topics like this as I'm not sure it's the right phrase, but a two sided business model. So on one hand, there's direct benefit to customers, like knowing how much water you've got in the tank or heating my hot water when my electricity tariff is cheap.

[00:11:34.010] - Jon

If I'm on a dynamic tariff on the other side, then is the services to the electricity system and the value of that, of course, can be shared from customers as well. Martin, can I ask you to just tell us a bit about how you're going to market and how you communicate those benefits to customers from your product.

[00:11:55.060] - Martin

Yeah, sure. I think one of our biggest challenges is how is that there's a number of market segments that we can go after, and as a small business we're hungry for that business. We're hungry for growth. We've got to try and keep a focus at the same time to make sure that we're not spreading ourselves too thinly. But we sell to British Gas, which is really important. And Mixergy tanks are being installed for homeowners who are typically when having a new boiler installation, and they can include a Mixergy tank with that a really fast growing area at the moment is with new build housing.

[00:12:34.220] - Martin

And this is the new build housing providers with clean technology, renewable technology. It's often about compliance with building regulations and lowest cost compliance, and there's a really good opportunity there because we are recognised in SAP, which is the UK Building regulations to listed under Appendix Q. The benefits that we bring in lowering carbon and lowering running costs when you combine a Mixergy tank and solar PV. So because of that, we provide this solution now, having gone through quite a bit of testing with the building research establishment, BRE and the UK to provide this easier and cost effective way for house builders to get compliance.

[00:13:24.710] - Jon

That's a channel to the housing developers. The British Gas one, I guess, is a channel direct customers through British Gas. Most customers won't know anything about their hot water tank other than they've got one, I guess so. Do you have to rely on, do you think when you look at selling to households like mine, you need to rely on installers to specify your product, or can you communicate the benefit, or can someone communicate that benefit directly to households, to people like me?

[00:13:57.070] - Martin

Yeah. I think the installers are really important part of this. And I think that's the same across the heating industry and the role that they play in specifying products. We've got a network of aside from British Gas, we've got a network of it's about 180 installers at the moment who are spread across the country in different shapes and sizes, who are operating, selling and selling Mixergy products to homeowners. And often they're the ones who are pushing it. Those proactive installers, perhaps those guys and girls who are installing heat pumps and other renewable technologies who are promoting Mixergy.

[00:14:35.230] - Martin

And then you've got the homeowners themselves. And we also sell directly to homeowners who come to Mixergy. Maybe they've seen us on sites like Fully Charged or they're just aware of what we're doing in the market and they're really excited about the technology and it's typically those early adopters. They're on this journey where maybe they've got the PV, they've got the electric vehicle, maybe they're going to get a heat pump and the Mixergy tank is another part of that journey that they're on to that nirvana of net zero.

[00:15:08.150] - Jon

I see what you mean about the different routes and different options and the challenge of focusing. What do you think in the next years, what routes do you think will be most important to you out of the house builder, the installer, the direct customer?

[00:15:26.570] - Martin

Yeah. I think it's really important as a small business, we can be really disruptive in a market that's really traditional because most of the hot water tanks are sold through merchants. And that's the way that they've always been sold because we're small, we're flexible, we don't have any sort of baggage, really. In terms of trading partners, we can be a bit more disruptive than the approach that we have. And we like that. But at the same time, we've got to scale. We've got to grow up as a business and it is about making sure that we can get our product to market in the most effective way.

[00:16:02.250] - Martin

So as we grow our installers, we need to make sure we've got a supply chain that can support that. And that's where you get the value from those players in the market, whether they be house builders who are buying or maybe social housing contractors who are part of a funded retrofit scheme or installers who are installing for private homeowners. It's evolving all the time.

[00:16:24.830] - Jon

What's the sort of price comparison or premium on a hot standard hot water tank?

[00:16:32.850] - Martin

A rubbish answer, but it really depends because you can get a really cheap, cheerful dumb hot water tank for a few hundred pounds, and then you can go up to a premium tank like a Mixergy or others, which might cost £1500. But it depends on the heat source. It depends how you're using it and the functionality, whether it's unvented, vented, direct or indirect, and how it's heated. But there is a premium with a Mixergy tank for sure, because it's smart and connected because it has a computer that sits on it and a whole bunch of other technology that adds that value that gives the return.

[00:17:13.400] - Jon

Yeah. Okay. Thanks, Martin. Stavros. Let's look a little bit more then at how you Centrica work with all these tanks, and there's 3 MW of capacity that you've got connected up. Talk our listeners through what, actually, what you do with that? How do you network them? Where do you use that flexibility? How do you monetize that?

[00:17:35.780] - Stavros

Yeah, it's interesting. You made the point on a two sided business model. You probably heard from Martin. Now it's a bit more complex than that. From a demand response point of view, it can be more complex and you've got multiple value sources and stakeholders. So you've got the device, you've got the customer, you've got the energy market, you've got the grid operator. There's a number of parties. So from a business model perspective, we kind of think of it a bit more like a hub and spoke. You've got the customer and the device at the centre.

[00:18:07.040] - Stavros

The device ultimately has to do its day job. It can't be doing flexibility all the time. We can't disrupt the customer's lifestyle. We try and optimise these devices with minimal to negligible impact on the device's day job. So that's really the focus for us is making sure you protect the customer and the device and you do this in a way that the customer can trust you. And then from a spoke perspective, you've got all these value pools. Now we've always designed our technology and capability to be quite agnostic to value pools.

[00:18:35.570] - Stavros

So to participate in whatever services that are open to that particular device with the particular specifications on the services to the grid operator. But we had always developed with an eye to the energy bill and being an energy supplier with British Gas  at Centrica. If we have automation and optimization of these devices, we can actually reduce bills for customers as well, so we always designed to be quite holistic in the value optimization, and that's the end goal is really to optimise the home, the device and the bills for customers to really maximise the value of the device for the customer who owns it, the energy system as well.

[00:19:19.320] - Jon

So using that example of the tariff, you're networking the hot water tank, the Mixergy water tanks. Let's say you're selling that to the system operator and generating some revenue, then that revenue could be shared back with the customer through the tariff in some way.

[00:19:38.050] - Stavros

Indeed, as I said at the beginning, we've got two business models. One is through our partners, such as Mixergy, where we provide a technology integration and we generate some revenue from the grid operator. And we share that with our partner. And it's really our partner that fronts that benefit to the customer just on that one.

[00:19:56.480] - Jon

Then, Martin, how would you at Mixergy provide that benefit to the customer? It's an area that I'm sure will become very big, but it's new business models, new revenue flows. So how do you think, Martin, about that flow of money back to the customer from that flexibility value?

[00:20:18.120] - Martin

Yeah. I think it's really exciting. And I agree there's massive potential there, as it stands at the moment, the involvement, the impact on the customers is minimal, the way it works. Essentially, Centrica pay Mixergy for what we provide. And because of the size of 3 MW, which is tremendous great news today that's still small. And so the return that we get from that is really not significant at this stage. And that's where we need it to scale. And that's where it becomes more significant. And as it does develop and as it does scale, then we can really see some exciting business opportunities.

[00:21:06.730] - Martin

We can offer something back to the customers. So it becomes more than just supplying, selling someone a tank and providing them smart connected services. There's other business models that we can develop alongside organisations like Centrica.

[00:21:24.470] - Jon

Yeah. Okay. It sounds like that will take a bit of time. You don't need to have all of those business models in place today with 3 MW. But over time, as you grow, those amounts of money will become more significant and you can evolve and experiment and explore different ways.

[00:21:40.470] - Martin

Yeah. I think it's an emerging story. Not least for us, we're growing a network of tanks that are deployed, but also the value of the energy service revenue streams is a moving story. And it will be interesting to see where we can fit into that and where Mixergy tanks deployed in different markets. Again, where there's different opportunities there. It'll be interesting to see how that develops and what business models that will spin out of it again in a market by market approach.

[00:22:14.010] - Jon

Stavros I interrupted you there with you. Let's get back to the second one.

[00:22:21.730] - Stavros

As I said, we always designed this to be able to stack as much different sources of value on top, which ultimately benefits the end customer. We just kind of talked about from the grid operator. But obviously now, with smart meters having been deployed out throughout the UK and the ability to deploy smarter tariffs, really, and to design smarter tariffs. And when you combine that kind of smart tariff with device automation, you can actually reduce the costs in the background to supply the customer. Ultimately, it's a virtual power plant.

[00:22:53.370] - Stavros

You can get it to behave as a traditional bricks and mortar power plant and access the same values. So I think that's where this space is going to become really exciting when you start combining the smart tariffs with the smart device with a great consumer proposition, a great customer experience. And you can start really returning that value to the customer and reducing bills. Really, I mean, there's some negative things you can do with value. You can discount appliances, you can give rewards, you can give cashback.

[00:23:20.410] - Stavros

There's all that great stuff. But ultimately, we are helping the energy system. We're reducing the cost of the energy system, we're reducing the cost of supply and really getting all that to the customer in a number of benefits is where this is going to get exciting and innovative.

[00:23:35.710] - Jon

How quickly do you think that happens Stavros, you alluded to a tariff next year. But I sense and share your enthusiasm at the way in which these values can be shared with customers. There's going to be a journey that Martin describes for Mixergy as well. But how quickly do you think that will happen?

[00:23:56.020] - Stavros

Well, I think this has been a journey for a number of years. There's a lot of experience. I've been working on this for ten years now, and I think the technology has caught up with some of the business models. And as you can see with the example of Mixergy, we are delivering a real service to the energy system. We're participating in a service that was traditionally the space of traditional power plants. So the technology is proven. The business model is proven. It's about scale now, and we are actively working at Centrica through our Hive business now and expanding our kind of traditional smart home and thermostat business into energy management for low carbon devices.

[00:24:32.950] - Stavros

So we are focused on that. We're working on it Centrica. And as I said next year we have plans to launch propositions. So we're at the tipping point now. I think where you can launch innovative propositions, they work technically and you can release real value to the customer.

[00:24:48.130] - Jon

Yeah. Okay. And the challenges in the years ahead, Martin and Stavros, if you reach out to pinpoint what you think this will scale, what's the biggest challenge in scaling it in the next year?

[00:25:06.990] - Martin

Do you want me to go first Stavros?

[00:25:08.760] - Stavros

Yeah, go for it.

[00:25:12.730] - Martin

I think that the challenge for Mixergy within this is what the different markets are doing. What the opportunities for us to develop our business models in particular markets. So what might work and be relevant in the UK market could be completely different in France or Germany. I think that's the challenge because it makes it very difficult to plan for. And it's exactly the same with the application of our tanks as we're looking at new markets to go into, to sell our products and to demonstrate the applicability of Mixergy in homes in different countries.

[00:25:51.010] - Martin

The reasons for doing it are different. And I think that's exactly the same for the energy services models. Those revenue streams are going to be going to be different. The opportunities are going to be different. The business models will be different. I know it's something that Delta-EE covered a lot in good markets for flexibility, bad markets. And I think that's the biggest challenge from my point of view. Where do we go for on this?

[00:26:16.290] - Jon

Yeah. Okay. So you can't develop a product and then put it into every European market. It's got to be a market by market approach, which makes it harder to scale.

[00:26:28.600] - Martin

That's right. It's not a one size fits all.

[00:26:33.290] - Jon

Stavros, how about from your perspective?

[00:26:34.610] - Stavros

Yeah. The challenge for me, we've kind of alluded to it earlier. Although this is a super exciting space. It's a good business model and it's good for the energy system and net zero and low carbon. Ultimately, it is a cherry on top business model. You don't buy a Mixergy tank to participate in national grid flexibility markets. Nobody does. It's a cherry on top business model for the manufacturers, the grid operators, the energy system, and ultimately, the consumer, its not the thing that you wake up and think about every day.

[00:27:06.650] - Stavros

The challenge is going to be for companies like ours and companies like Mixergy to gain the trust of consumers to automate their device, help them reduce their energy bills, but also to create really customer centric propositions, reasons that customers want to participate in this because it is a cherry on top business model. Nobody's going to wake up and buy demand response not going to happen.

[00:27:32.030] - Jon

The core reason for buying that hot water tank, I guess Martin, Mixergy will stay laser focused on creating a product that just works beautifully for customers. You can never lose sight of that.

[00:27:47.230] - Martin

Yeah. And I think the simplest thing, the thing that really resonates with the simplest thing, this idea of heating what you need, that's the thing that customers get. It's obvious. It's obviously you should only heat what you need. Very simple. And so for all of the other stuff about the platform, about connectivity, about being smart. Yeah, that's great. But at the simplest level, that's incredibly powerful, having something that works well for you and gives you a better experience.

[00:28:18.110] - Jon

Klara, that's I guess what we see with some of these other products. It's about heating what you need or a smaller hot water tank. There's different benefits from different types of products in this area.

[00:28:31.250] - Klara

Yeah, exactly. It's about reducing the space that it takes up while also reducing the running costs for the consumer, which is obviously big pain point for a lot of consumers is how much my heating should cost.

[00:28:44.210] - Jon

Yeah. So yeah, I sometimes get too excited about the electricity system aspect of this one, but it's a nice reminder that it's got to be right for customers. And Martin, I guess it's going to be easy for installers to work with if they're an important channel for you.

[00:29:03.830] - Martin

That's right. I guess it's the sizzle of the connectivity piece and the energy service. Is that's really exciting? The revenue streams and the potential and how you can support the broader energy transition is really exciting when it comes down to the guy who's going to fit something in an airing cupboard. And how easy is it? What's his experience in doing it? What's the user's experience? We can't do any of the big stuff unless we get thousands of tanks or other assets out there to provide that capacity.

[00:29:38.630] - Jon

Okay, well, keeping our time. Let's bring out the talking new energy Crystal ball. And I'll set the dial today to 2026 five years time, and I'm going to cheat a little bit and tailor the questions slightly to each of you. So, Martin, I'll ask you first obvious question, where will Mixergy be in five years time, and you can choose whatever metric you want to choose to answer that question.

[00:30:08.490] - Martin

Yeah. So I think we're in a really good lucky place. I think we're in a fortunate place because the decarbonisation of heat that's happened over the next decade is absolutely going to happen. And the opportunity for us is to ride that wave as best we can. So where do we see ourselves by 2026? Well, we're certainly pushing internationally, and we would certainly expect by then, we've got a substantial presence in core markets that already we feel we know some of them and we're making those steps to get involved in those markets in the EU and also in North America.

[00:30:57.150] - Martin

I think as well part of that is about how we can licence our products. And that's a key part. It enables us to work with other massive players in the heating industry to achieve volumes with our technology out there. And I think as well as that possibility that expansion into other products and services. So already we've got an EV charger offer and thinking about how we can complement the way that a hot water tank is working with an EV charger in someone's home to get a new build.

[00:31:30.540] - Martin

Where we just found out this week, the government saying every new house has got to have an EV charger. There's other areas of space heating, other services where we can provide some value to help get customers in control of their journey to net zero over the next 5 - 10 years.

[00:31:48.610] - Jon

Okay. Interesting. So potentially moving from optimising a single appliance into more of a home energy management approach.

[00:31:55.310] - Martin

Yeah, it's going to be more than just a hot water tank for sure.

[00:32:00.510] - Jon

Thanks. Martin. Stavros, five years time you're at 3 MW today. I don't know if you're going to answer this question directly, but how many megawatts will you have in five years time of hot water tanks?

[00:32:13.350] - Stavros

Yeah, I will answer the question in five years time. Firstly, I hope Mixergy meet all of their objectives because they're a partner of ours and what benefits them benefits us. And they're a great partner. I'd love to see our first million customers on the platform. I think that is more than doable within that time scale, but I think this industry is notoriously bad at using the crystal ball, and it's been quite a long journey and a tough journey to get where is this is going to rely on a partnership ecosystem.

[00:32:45.490] - Stavros

So working with great companies like Mixergy, but I think a million customers is certainly possible far higher than that is. But that's personally where I set my targets on. And I think I said earlier I remember the first Mixergy tank being connected. It was a huge deal when we had the first megawatt woke up this morning and it's three. So the snowballs started and I think that's really fantastic to see real flexibility from residential devices and really displacing what was traditionally done by fossil fuel and centralised generation.

[00:33:19.920] - Stavros

So lets be ambitious.

[00:33:22.110] - Jon

Your ten years of investment in this area is starting to pay off. Thanks. So, Klara, last, but not least looking five years ahead, how much thermal storage will we see in household? That's beyond what I'd call the traditional storage users and the standard hot water tanks. So how much advanced thermal storage will we see?

[00:33:46.270] - Klara

Yeah, that's the burning question, isn’t it? It's not something I'm afraid I can answer right now. I don't have any numbers. It's something that we're exploring right now in our heat research. So hopefully I'll have some kind of outlook and forecast for you in a few months. What I can say is that since most low carbon heating systems need some kind of thermal storage, there will be a huge opportunity for these products in the future, and especially the smart ones who can provide more thermal storage capacity than a standard hot water tank and have that controllability and flexibility.

[00:34:21.430] - Klara

I also think that most heat pump manufacturers will like to include smart storage of some kind in their portfolio as the value of demand side flexibility opens up in more and more countries. We also expect these opportunities to capture value from flexible electric heating directly and through aggregators and that this will increase the value proposition of the thermal storage products.

[00:34:49.990] - Jon

Okay.

[00:34:53.410] - Jon

Yeah. So how quickly that goes? It's not if, but it's how quick.

[00:35:00.250] - Klara

Yeah, exactly.

[00:35:02.890] - Martin

I think for us as we look at the metrics, the hot water tanks installed in the UK every year is around about 400 - 450,000 new cylinders installed per year. And as we look over this decade, how that might grow. And certainly our view is if Boris's pledge to install 600,000 heat pumps by 2028 gets near every single one of those heat pump installations is going to need a hot water tank. We're shifting away from fossil fuels. We're shifting away from combies, so a hot water tank is going to be an added present in homes.

[00:35:44.050] - Martin

And so that current 400 and 450. But by the end of this decade, we would certainly expect that to have doubled and maybe get closer to that million tanks per year just for the UK. And of course, this is relevant to all other European markets and other markets, too.

[00:36:02.350] - Jon

Well, I just love the thought of the hot water tank, which most householders think of this boring steel thing in their cupboard or in their attic or in their basement somewhere, being a really important part of our energy system and enabling customers to have the right amount of hot water at the cheapest cost. So yeah, thanks. We'll draw it to a close there. Thanks, Martin. Thanks, Stavros. Thanks, Klara. It's been great hearing your thoughts today. Thank you all very much.

[00:36:35.930] - Stavros

Thanks, Jon. Thanks very much.

[00:36:37.000] - Klara

Thanks, Jon.

[00:36:38.050] - Jon

And as always, thanks to everyone for listening. We hope you enjoyed the episode. Maybe you're going to take a look at the hot water tank that's in your house or flat somewhere, or if you don't have one, think about maybe what you will have in the future. Thanks for listening and look forward to welcoming you back to the episode next week. Thanks and goodbye.

[00:36:58.490] - Jon

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter LinkedIn or subscribe to the podcasts on your chosen podcast platform. If you like the podcast and like sharing, then please do rate us and to listen to archived episodes to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com.

[00:00:04.730] - Jon

Welcome to Talking New Energy, a podcast from Delta EE, the new energy experts. We'll be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.

[00:00:21.490] - Jon

Hello. And welcome to the episode. Traditional energy retailers are having to evolve fast to drive the energy transition. And a big part of this evolution is launching new and innovative services and propositions around new energy, very different from selling kilowatt hours to customers. And it's a hard journey for them. How do energy retailers improve the chances of success when launching a new proposition? Because, to be frank, a lot of new propositions don't take off like retailers would hope. Today we're looking at this topic, talking with an energy retailer from Estonia and looking at their experience of developing new propositions and business models, specifically in the heating market, which is an area we think is ripe for change and disruption.

[00:01:21.670] - Jon

So let's say hello to my guests. First Evert Eero, who is product development manager at Estonia Energy or Eesti Energia in Estonian I guess Evert? Hello. Welcome to the podcast.

[00:01:38.230] - Evert

Hey, Jon. How are you?

[00:01:39.870] - Jon

Good. Thanks. Excited to explore your experience in developing new products and services in Estonia. So, yeah. Can you give us a very quick introduction to Estonia Energy? I'll go with a safe English pronunciation rather than attempt the Estonian one. Who you are, what you do?

[00:02:02.890] - Evert

Sure. So first of all, thank you for having me. I have been an active listener of Delta-EE and you're providing lots of valuable insights. Estonia Energy is basically an international customer centric utility. We operate in five countries from Finland all the way to Poland. And our number one ambition is actually to provide useful and convenient energy solutions to our customers. So basically, I have been working in a product development field for different customer centric services and from solar panels, insurance, lighting as a service, smart home heating, data desegregation from all different fields.

[00:02:49.310] - Evert

So, yeah, it's been a cool ride.

[00:02:52.120] - Jon

Great. I don't know how many listeners we have in Estonia beyond obviously you Evert. But I don't know how many of our listeners outside of Estonia know about Estonia. Obviously, it's famous for being the home of Skype many years ago. But can you give us a quick, a few cool facts or points that will help our listeners get to know Estonia a bit more?

[00:03:22.570] - Evert

Yeah, sure. It's always good to hear what someone is saying that you have such a cool, innovative country. We have 1.3 million people. And as you said, Skype was our first successful tech company today, we already have seven successful unicorns. You might know some companies called Wise who is doing money transfers internationally or Pipedrive. So there's many different companies out there already. And what we are seeing at the moment is that the speed is accelerating. We are getting more knowledge how to build those products and services.

[00:03:58.600] - Evert

And people are more eager to learn and since we have those investments and understanding how to build companies, it's getting even better next year.

[00:04:07.210] - Jon

Okay. So it's almost like a snowball rolling downhill where it's getting bigger. The ecosystem, the people involved in Skype are now doing different things.

[00:04:17.310] - Evert

Exactly.

[00:04:20.290] - Jon

Well, I haven't visited Estonia, I'd love to visit it one day. Let's say Hello to my second guest today colleague, Lindsay Sugden. Hello, Lindsay.

[00:04:31.330] - Lindsay

Hi, Jon.

[00:04:32.450] - Jon

Thanks for joining the podcast again. So, Lindsay, you've been on the podcast before talking about heat. The theme of this podcast is new propositions and business models. Why is that so important? It's important in many aspects of the energy transition. But why do you think it's so important specifically with regard to heat?

[00:04:57.610] - Lindsay

Well, I think it's becoming clearer and clearer that decarbonizing heat in existing buildings is a critical part of the energy transition puzzle. It's critical to meeting government targets on decarbonisation, et cetera. But it's notoriously difficult to make that transition happen in the heating market. Customers are really attached to their traditional heating systems. Often gas boilers and low carbon heating systems are generally more expensive. Customers are a bit unsure about them and don't always trust them, even when they're like heat pumps and mature technology.

[00:05:46.860] - Jon

It’s different and new. People don’t understand, and they're not familiar with it.

[00:05:48.340] - Lindsay

Yeah, exactly. So there's a real need for innovative propositions that can take some of that risk away from the customer, take some of the uncertainty away and also tackle the upfront cost issue as well.

[00:06:05.050] - Jon

So heat as a service as an example of that or elements of heat as a service.

[00:06:10.630] - Lindsay

There's a whole range of different, heat of the service, like at one end of the spectrum. But there's a whole range in between of different ways that you can tackle some of these challenges. They've been trying to decarbonize heat in existing buildings for years, and the progress is so slow it can't continue kind of incrementally. Something a bit more dramatic needs to happen. I think an innovative business model, this is one important element.

[00:06:39.480] - Jon

I think we're recording this in the last days of COP26.

[00:06:43.580] - Lindsay

Yeah.

[00:06:46.310] - Jon

I think coming up, COP26 is the need to accelerate dramatically what we're doing. And that is more true for heat, I would say, than anything else.

[00:06:57.080] - Lindsay

Yeah. It's time for a paradigm shift, not just continuation.

[00:07:03.110] - Jon

So Evert. Let's talk about heat in a minute. But first of all, I'd like to understand your approach to innovation and developing new propositions and business models for customers. Because I said in my introduction, the energy sector has not been very good at that. It's a bit of a generalisation, but I stand by that. You've already mentioned customer centric once, which was in your introduction. Great to hear, but tell us a bit about how your company approaches this topic.

[00:07:39.770] - Evert

It's a great question, actually, because without my six years of experience working in energy field, I have seen both failure and success, more failure. To be honest. And if you look at the statistics, then 80% of new products and services will fail on the market anyway. So it's Neilson research have done it. And it's just a fact. And you can even have, like, a super team, super competitive researchers, developers. You might have the money to do it. But what happens is that once you launch a business, you probably will see that it will fail.

[00:08:17.300] - Evert

So what we found out is that the only way how you can succeed in a way like Amazon or Facebook or Netflix are doing is that you need to test as many ideas as possible, because if you're putting out as much information or as many tests as possible, then you're increasing the probability of being successful to find out those golden nuggets.

[00:08:39.390] - Jon

So those tests. Are you talking about theoretical things, research or the more minimum viable product and actually getting an offer in the market? What do you mean by test?

[00:08:50.210] - Evert

Yeah. So what we have in Estonia, we have in house accelerator. It's called Idea Hop, where we are, first of all, gathering all those different ideas. We are also working together with universities and investors to work through those ideas. But when we talk about testing, then there are so many different principles and solutions out there. How you can test and what I personally found out that has worked the best is methodology that came from ex Google employee. It's called Alberto Savoia, and he calls it prototyping. So what it means is that you're basically building a first level of the service or solution that you have and you show it to your customers right away.

[00:09:37.280] - Evert

And then you're measuring the data. What customers do, not what they say. So it's not just that doing research, it's more showing the end product for a customer as fast as quickly as possible and then measuring the results.

[00:09:50.690] - Jon

Okay. What's your journey being like in terms of reaching the point where you're at now? Have you been using this methodology for years? Have you had lots of failures and that's causing you to scratch your heads and work out. How can we do this better? Give us a feeling of that.

[00:10:09.060] - Evert

Yeah. It's a good question, because at first my biggest failure was probably related with the smart home topics. And I know lots of utilities have been struggling with a smart home in this field. And the biggest challenge in the beginning was definitely how to convince your marketing team and your other team members to show something for the customers that is not even ready yet. So because you have a friend, you don't want to just show something and then not deliver it. But how we have overcome the idea is that basically, if customers don't want to buy your service or solution, they don't even care if you have it or if you don't have it, because if you're showing something that they are super interested in then they are willing to wait as well.

[00:10:54.780] - Evert

So I remember I was recently doing a test for heat pump as a rent service, and we did the same approach. And basically what customers were saying when I called them just to understand that, why did you sign up? They were like, yeah, I saw it was test because we were showing at the end of the test that it was just a test. Apologies for that. But you will get 20% discount once you order it. And customers like, yeah, I saw it. But when can I have it?

[00:11:21.860] - Evert

So it's actually not worse. So you shouldn't be afraid that it's not ready yet. It's more like getting really good data. Otherwise you would just save money. You will spend too much time, too much money, resources to build something that customers don't ever buy.

[00:11:35.900] - Jon

And was it hard to convince your colleagues internally? You mentioned that earlier. So how much resistance has ever been to that methodology? Now we've got to have it already. We can't just say it's a trial at the end. If someone signs up, we've got to be able to do it straight away. Is that hard? Or people really embrace that?

[00:11:55.670] - Evert

Of course, it was hard in the beginning, but there are different tricks and hacks. What you can do. One example could be that, for example, if you have a huge customer base, you don't have to send it to everyone right away. Mathematically, if you're sending out emails to, for example, 100 customers, it's more than enough to have a relevant data to get it. Or if you're doing social media campaigns to drive customers to your fake website, it's more than enough. So it's hard in the beginning.

[00:12:23.050] - Evert

But you're saving so much time, money and effort. And people actually, later on, if they see that it really works, they're more willing to work with you and bring those solutions to the market. So it's a super approach in that sense.

[00:12:36.380] - Jon

Now I want to know what this customer said about the heat pump rental. So why did they sign up for heat pump rental? Or do you think heat pump, the idea of renting a heat pump, is that something that tested well, or what have you learned from that test?

[00:12:51.290] - Evert

Yeah. So when we're talking about heat pump rental, then usually people who haven't purchased any heat pump before they are completely lost, they don't know what it is. How is the installation? What is the maintenance? So what happens after two years, if I have any problems? And there are so many questions people have. And while we were doing the testing, we found out basically different ideas, what people need and how to approach it? For example, one thing was that on our side, we wanted to reduce our risk.

[00:13:23.600] - Evert

So we wanted to ask installation costs before having this monthly subscription for a heat bump. The customers were saying that, no, I don't want to pay, for example, €400 to have the heat pump with monthly fee with €50. We would like to have it if it's included in the price.

[00:13:37.640] - Jon

So they want that €400 included in the monthly subscription with no upfront cost.

[00:13:45.600] - Evert

Exactly. So we included it in the price. And we were saying for the customers that if you opt out from our deal before some experience, then you will pay the installation so it's equal on both sides. So it worked really well in that sense.

[00:14:02.090] - Jon

And are you doing that? Is that now an offering you've rolled out to your whole customer base, or is that still in development?

[00:14:09.890] - Evert

Yeah, it's up there. We launched it in the summer and first we were predicting to get approximately 5% conversion. So from the total sale, I remember from Delta-EE materials as well that you were predicting approximately 5% of customers will be interested. But what we have seen is that it's already over 20% of customers who are signing up for the rent service. And in that case, it has been super successful. And we're having more thoughts and ideas how to even extend it to other products as well.

[00:14:45.960] - Jon

That's good to hear, Lindsay from looking across Europe if we stick on heat pumps at the moment. And heat pump rental or heating as a service, these sorts of offerings, how would you characterise in general, what the market is doing, is what Evert’s talked about quite unique, ae there others that are already getting a similar sort of success with this offering?

[00:15:14.990] - Lindsay

Yeah. There's more and more examples of companies offering these kind of customer propositions around heat pumps. But I would say if you look at the whole heating market, the majority of players who are testing heat aa a service type models, they're doing it with gas boilers to begin with. So the number of gas boilers that are installed on these kind of contracts is, in order of magnitude higher than the numbers with heat pumps. But we're seeing that a lot of the companies who are starting off on the boiler side.

[00:15:52.390] - Lindsay

So for Thermondo, for example, Vaillant in Germany, they're starting to go into heat pumps as well. But it's like once or the key point is that once you've got the customer on board with some kind of contract where they have to pay some monthly fee, be it to rent the heat pump or full kind of heat as a service. Once you've got them on a monthly fee, then you can change the heating system from a gas boiler to heat pump. You can kind of decouple that relationship between the end user and what the heating system actually is.

[00:16:34.700] - Lindsay

And it becomes a relationship between the customer and the heat. It doesn't matter where it comes from. So we are starting to see that transition from some companies. And then the best example of where heat pumps themselves have become more rolled out in this way is in Denmark, where there's been a focus on testing innovative propositions of different kinds of business models, going back to five years or so, starting with government demonstration projects and so on. But now most of the big energy companies are doing this, it’s quite normal. It's advertised everywhere.

[00:17:17.170] - Jon

It's funny when I talk to people in the market about these type of rental offerings or heat as a service offerings, I always get two questions and Evert I'm going to ask you how you handle these questions. One question is, yeah, but it will have to be a ten or 15 year contract, and no one wants to sign up to a contract that long. And then second the risk - if it's our heat pump and we're putting it in someone's home, what happens if they stop paying? We can't have our asset in people's homes in this kind of way where it's not easy to remove or manage that risk.

[00:17:59.810] - Jon

So how have you got around those two challenges or what's your thinking on them?

[00:18:05.950] - Evert

Great question. There's basically different ways how you can handle it. When we talk about the first question that you had like for having a long term contract. So, for example, if we are selling solar panels with the PPA models, then we are having given contracts up to 25 years. So this hasn't been a big issue for us. When we talk about heat pumps, then we have a policy in our contract for customers that they can opt out with one months notice. And financially, we have calculated to have a small fee so that they have to pay for us.

[00:18:46.040] - Evert

And we know that we can use the same heat pump and install it in some other locations. So you have to do a little bit of a financial calculating to understand how do you price it and how do you do it? And it also comes hand in hand with the other question that you had is that how do you make sure that those devices are there and there are no issues and problems? One way how we have handled it is that we're doing yearly maintenance, definitely for the devices, and we have also an insurance policy behind it.

[00:19:18.120] - Evert

So we made a deal with insurance company who is covering up those devices. And this monthly fee is quite small in that case, because we are planning to sell them as much as possible.

[00:19:29.750] - Evert

So of course, there are risks. This is true. But at the same time, why I really like the information that I have found from Delta-EE as well is that if we are sharing this knowledge between different utilities and different companies who are providing such service, then we start getting more data. How does devices operate? What are the customer segments? What are the biggest faults or problems? And if you're willing to take the risk as a utility or as a service provider, then the payback is much better. Because if you look at the profits for those devices that you're offering there are two to three times even higher than if you would sell them as a turnkey solution.

[00:20:05.860] - Evert

So the return is higher. Of course, there's a little bit of risk, but it's definitely worth doing it.

[00:20:11.000] - Jon

Can I ask you about risk? Because if I characterise the energy sector very simply from old energy to new energy, old energy companies were used to de-risking everything they didn't want to take risk. Their company shares were seen as low risk, steady return companies. In new energy, what you've talked about is not knowing everything, putting something quickly in the market, even when you get that reaction, you don't know how many customers will say, hey, I'm going to cancel after six months. How does your company think about risk?

[00:20:51.400] - Jon

Or has that been a hard journey you've seen within your company to take the risk?

[00:20:56.830] - Evert

Yeah. Well, we are a big corporation and we have a risk policies and everything, and we have to be sure that we minimise the risks. What I have found out, what works best is that data beats opinion. So there are so many smart people out there saying that you have this risk, another risk, and third risk, even if you're building a new service or solution. But you can minimise the risk or even sell your idea once you have a data to back it up. So then we come back to that validating and offering the service for customers.

[00:21:30.110] - Evert

For example, if you're doing those preliminary tests and what we also do, we have an XYZ hypothesis in those tests. So we are saying that, for example, 5% of middle aged men will buy the heat pump service with €50 a month, and we have really specific set numbers there. Those come from those financial models. And if we exceed those results from those tests that we have set before doing the test, then we have a solid data to show first to those decision makers, for example, on the C level, there's a big interest.

[00:22:02.860] - Evert

We also calculate what are those costs and risks. And if they see both sides the benefits and risks, then it's possible to do it.

[00:22:11.060] - Jon

Okay. Some of those risks, like the risk of people cancelling. You'll only get that data. How many people cancel within three years? You only get that in three years so you can get a certain amount of data. But I like what you just said about that balance of the reward, the benefit and the risk is almost accepting. You're not going to know everything for some years. But if you believe enough in the opportunity, but not opinion, but there is also some belief in there, isn't it?

[00:22:44.740] - Evert

Yeah, of course. And also for the product managers, for them to pitch the idea in a way that it should work. Yeah. And one thing I didn't mention is that we also have a customer's data how well they have behaved while buying electricity, for example, or gas from us. So we know this historical data that they didn't have any debts, for example, for a few years, or if they're buying some other services from us, for example, EV Chargers or solar panels, they know as well that their financial background is good enough to do the rent.

[00:23:13.390] - Evert

Yeah.

[00:23:13.660] - Jon

Okay. And there's third party data also that we get as well to blend together. Lindsay, how do you see the heating sector thinking about these risks? Was I a bit unfair in characterising it, but there's so many risks. It's so too hard to do. We want to lock in all the returns, or do you think actually the heating sector is now starting to experiment and develop in the way Evert described?

[00:23:41.270] - Lindsay

Yeah. I think it's very different, depending on the type of company and the scale of the company. Some of the big energy companies, the biggest ones in Europe, they're quite slow moving. Sometimes the challenge with launching some of these kinds of models has been that they can't prove their success fast enough. They don't get enough time to test before a decision is made from the top, well you're not making enough money fast enough so we can't go ahead with that. I think what's changed in the last few years is that there's been new kind of startups and other companies coming from other backgrounds who are coming in and competing in the same space, and that's forcing those larger slower moving companies to actually think, hey, we got to do something differently.

[00:24:32.220] - Lindsay

Otherwise we're going to lose out now. And that's the real difference from, like, five years ago. And it's companies coming from outside of energy altogether. Or it's heating companies, manufacturers, for example, becoming service providers, like a company like Viessmann probably is a good example. You can buy gas from them now and then you've got startups or companies like Thermondo is kind of disruptive one. Or there's a lot of different examples of new small companies who are gathering a lot of investment, have a really innovative and really customer focused approach, and they're taking more risk.

[00:25:16.710] - Lindsay

They don't always succeed, but they're paving the way. And I think it's forcing change.

[00:25:24.570] - Evert

So exactly what you said, what we should see in the future, or at least, I hope, is that once utilities and startups start working together so startups can be super fast. But utilities have the customer base. So if you could combine them in a smartest way, then you can see lots of good things happening.

[00:25:45.270] - Jon

Evert, last question before we bring out the talking new energy crystal ball. So you're applying this innovation to heat pumps. But to many things you mentioned, EV charges solar panels lots more. What's your biggest challenge or the hardest thing in your job to really transform the way that you provide customers with services?

[00:26:10.890] - Evert

Yeah, it's a great question. Anyone who has worked as a product manager probably knows that they have to work together with IT, from marketing teams, process operations, customer support, and others. So the hard thing is that you have to think in a strategic level and what you will do in five years time. But at the same time daily, you have to solve customer problems if they have any issues with their heat pump or whatsoever. So I think the hardest thing is definitely if you're developing a new services to have this data on the table.

[00:26:50.730] - Evert

So once you're making decisions or presenting it, you have packed it up in a way that is convincing for the others. And I guess the best way to do it is to do it with your own data and also back it up without other data. And then you can succeed as well.

[00:27:07.330] - Jon

Yeah. Okay. I like that. I think taking away that, use as much data as you can. There's always some belief there, but try and take as much of the opinion out of it.

[00:27:20.450] - Evert

Exactly. And also there's two parts. Actually, one is your own data and one is data from the others. So, for example, I love Delta-EE reports, and there's also valuable data, but at the same time, I have to be sure that in our markets work the same way. So with every utility, they should test it out as well. How it works in their own country.

[00:27:42.510] - Jon

Very interesting, well your passion and excitement for what you do come through very clearly, Evert.

[00:27:48.750] - Evert

Yeah, I love it.

[00:27:51.810] - Jon

Let's bring out the talking new energy crystal ball now. And I'm going to set the dial this week to 2026 five years time, and the question will be let's make it specific to heat as that's what we've been talking about. Evert, what do you think? The question to you - What do you think you'll be most proud of in five years time? If you're looking back on the next five years, just so to speak, with regard to your heat pump or heating offers and question for Lindsay, I guess more of an industry perspective on that.

[00:28:29.270] - Jon

So what do you think the industry will look back on in terms of selling heating in more of a service type approach in the way Evert’s described for Estonia. So Evert, what will you be most proud of? What would you like to be most proud of in five years time?

[00:28:47.250] - Evert

Yeah. I remember five years ago we were just having PowerPoints and slides showing that in the future, we have all those cool, fancy services. Today, we are in a position of having all those services. So the next thing I believe, at least in five years should be that we will start bundling those different services together. So, for example, if you're building a house, you could get all those services from one energy utility. For example, you could get the heat pump, you could get the solar panels, EV charger, and you have a home energy management solution that is combining together all the services that you have and that helps you to make those decisions so you could save energy.

[00:29:27.210] - Evert

And in five years time, it looks like a long period, but in utility wise, actually, it's quite short. But if you think about the customer centric products, there's lots of things that you can do. So I hope that we have tested as many ideas as possible. And with those testing, we have figured out what are those products and services that bring as much value to the customers as possible and having this value? I hope we have basically saved lots of energy and also CO2 in that sense.

[00:29:56.460] - Evert

So you could just save, I guess, tens of thousands of CO2 from atmosphere of having those services. So definitely it's hard. It's a culture change a little bit for the customers as well. But if we provide them services, our products that we already have out there, it's technically everything is already doable. But now it's the question of having this mindset and culture for those customers to start using those services that will work in the background. But at the same time, they see some sort of statistics or reports that shows that they have saved energy.

[00:30:31.410] - Jon

I guess the key to that will be creating the right bundles for the right customers. And we've seen in different industries like telecoms, that bundling be quite effective of telecoms, broadband, mobile TV.

[00:30:46.530] - Evert

Exactly.

[00:30:47.510] - Jon

But in the energy sector, I think we're just at the very beginning of that learning curve on how you bundle different energy services or products together.

[00:30:56.770] - Evert

Exactly. Yeah.

[00:30:59.250] - Jon

Lindsay, from an industry point of view, in the evolution from a pure product sale industry, which is what the heating industry largely is to an industry that also has a big service element service proposition to it as well. What will we see in five years time or what we look back on, do you think?

[00:31:21.270] - Lindsay

Yeah. I think in five years time, there'll be a realisation that the concept of just selling products upfront heating products, for example, only having the option of buying them up front. I think this will be a dead concept. Of course, people will still want to buy things up front, but I think everyone will realise that they need to have a range of different ways of buying heating products all the way from buying up front to renting, to leasing, to heat as a service, to comfort as a service to bundling.

[00:32:00.570] - Lindsay

I think there will be a shift in customer centric thinking so that the propositions are based around the customer rather than around the product. I think that's the change that people are starting to realise now, maybe we need to test some new models, but I think in five years time, or maybe I hope that people will look back and say, Actually, we have to do this in order to make money. It's not just testing new services, but it's actually a way to find new revenue streams.

[00:32:36.150] - Lindsay

It will be something that will start to make commercial sense like it's the only way to go.

[00:32:42.820] - Jon

Well, I really believe in that vision you've described, Lindsey, and what you're doing Evert. It's not a solution for every single customer. As you said, someone want to keep buying products. But if we're to decarbonize heat, decarbonize energy, a lot of the technology will be in customers homes. A lot of the products will been customers homes, and we urgently need to find those new ways to package that up in an attractive way so companies can make money. But so we can reduce carbon emissions and be on the path to hopefully 1.5 degrees maximum warming in the future.

[00:33:18.880] - Lindsay

Yeah. Exactly.

[00:33:23.290] - Jon

Well, time has got the better of us, so we'll call it a day there. Thanks very much Evert for joining and fascinating to hear about your work in Estonia and surrounding countries. Thank you.

[00:33:34.390] - Evert

All right. Thank you so much. And definitely keep innovating. And if you get stuck, hit me up in Linkedin somewhere, I can help you out.

[00:33:42.190] - Jon

Great. And, Lindsay, thanks for joining again. Sharing your views.

[00:33:46.280] - Lindsay

Yeah. Thanks, Jon.

[00:33:48.190] - Jon

And thanks as always to everyone for listening. We hope you enjoyed the episode and look forward to welcoming you back to episode two of the new series next week. Thanks and goodbye.

[00:34:00.190] - Jon

If you're as passionate about the energy transition as we are, then please keep in touch. You can follow us and me on Twitter, LinkedIn or subscribe to the podcast on your chosen podcast platform. If you like the podcast and like sharing, then please do rate us and to listen to archived episodes to read transcripts and to see the latest Delta-EE insights, then please visit www.delta-ee.com.