Last week Idealog suggested New Zealand's electricity market was lacking innovation. Bollocks, says Powershop CEO Ari Sargent. Our power market is light years ahead
Here’s a line you won’t hear anywhere else during the election - New Zealand’s power market is world leading.
In terms of innovation, no other country offers customers so much flexibility or control over how they buy power and how much they use. At Powershop, we’ve built a business of delivering New Zealanders control over their power consumption with our award-winning web and mobile platform. We’re now selling that platform to the world - proof that we have ideas and technology that are sorely lacking in overseas markets.
One market we’re achieving success in is the Australian state of Victoria, where three huge power companies control three quarters of the market and there has been little or no innovation until now. Margins are much higher than in New Zealand and the big three power companies price the same way and bill the same way. It’s a system designed to maintain customer apathy and as a result one in four households are stuck on default tariffs which are the most expensive in the market, despite the availability of discounted offers.
By comparison, Kiwi customers enjoy far greater choice and value. This is despite claims in a recent Idealog column that our current retail market is stale. The column profiled a new player with pricing based on the on the electricity spot market, and while we think there’s real value in new and different pricing approaches, it’s by no means the only alternative to traditional, flat or fixed pricing on offer.
Following spot prices works well in theory – a household could turn off the heating, oven or other appliances when prices head north, but in practice this is unworkable for most of us. Regardless of the market, we still need to get up and shower before work, cook dinner in the evening and stay warm during the colder months.
Powershop has worked hard for five years to give households around the country better value through seasonal power pricing, but also to insulate them from the vagaries of the spot market, where the price of a unit of power is very volatile and has been known to spike up to $20,000 per hour (it’s typically around $80 per hour). Our web and mobile platform also helps households understand where power is being wasted unnecessarily, like a bedroom heater or lamp being left on overnight.
It’s world-leading stuff. No other power company anywhere lets people use their smartphones to tactically shop for power, save money or reduce their usage. It’s the reason more than 20,000 Victorian households have switched to Powershop less than a year after we launched there, and the reason we’re pushing into New South Wales. It’s also the reason we’ve been invited to talk about Powershop at a conferences in the UK in October, a market of more than 50 million customers.
Although we still have our fair share of traditional retailers who push fixed pricing and keep their customers as unengaged as possible, our market is far from stale. Neither is it bereft of consumer choice. For those willing to look, there are real gems among the junk.
Idealog notes: This video is a bit of a gem too