AGL says race is on to be utility for both data and energy
The race to become the mega-utility that sells both power and data is well and truly on, AGL says.
Fresh from abandoning a $3 billion takeover of telco Vocus, AGL Energy says the nation’s big electricity players need to consider expansion into data and internet services or risk losing a growth opportunity to potential rivals Telstra and energy giant Shell.
Australia’s largest electricity generator signalled it will remain on the hunt for opportunities that allow it to significantly boost its energy and data capabilities and build on investments in connected virtual power plants, which link homes to send power back to the grid.
“We look at data and how you can use that information to provide support services from a customer back to the marketplace,” AGL’s head of wholesale markets Richard Wrightson told the Credit Suisse Australian Energy conference.
“I’m sure all the players are looking at how to do this. If we get it wrong we won’t be listened to again. If we do it badly, Telstra and Shell and the other brands will eat our breakfast. We have to do it well.”
Shell has signalled plans to diversify into the power sector in Australia, reflecting its belief the energy system will rely much more on electricity than fossil fuels for generation in the future.
Telstra, already active in procuring its own electricity needs, could push into energy on a large scale to diversify its earnings according to Morgan Stanley as NBN payments taper off in the coming years.
AGL unexpectedly scrapped takeover talks with Vocus on Monday, just five days after starting a four-week due diligence period and following chief executive Brett Redman’s comments the deal could stabilise more volatile earnings from its core electricity business.
Mr Wrightson described AGL’s key strength as managing risk in the market for its customers and expects to broaden that core skill to help connect up its legacy electricity and gas business with solar, batteries and eventually data services.
“As batteries and solar improves the opportunity for companies like AGL and Origin is to work out how you take the skills we have in managing risk and apply it both the domestic end, the small business end and the large industrial end.” Mr Wrightson said.
With over two million Australians already owning rooftop solar, the flow of energy back to the grid and the data that makes different devices talk to each other represents an opportunity for AGL.
“Once we are actually paying our customers to add AGL value, we’re actually reversing the relationship. We’re actually saying you’ve installed an asset in your home and we’re going to pay you to use those assets. So where actually giving customers value. That’s a real shift in and change in the relationship.”
RBC said this week that with AGL pushing into data value streams more quickly than anticipated, it may make more sense for it to look at providing NBN reselling services to its existing customers.
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