Embracing the challenges of energy retail

Stepping into the shoes of an industry stalwart who spent more than two decades at the helm of one of the UK’s longest-running disruptor brands is no easy task. Good Energy’s new chief executive Nigel Pocklington tells Utility Week he is excited at the prospect of having a hands-on role in what he describes as a fascinating market.

“The challenge, which is fascinating, is can you productise something that in its nature people think is just a boring background service?”

While his previous experience lies slightly outside the sector Nigel Pocklington is no stranger to the energy retail market. Most recently the new chief executive of Good Energy was chief commercial officer of Moneysupermarket Group, which includes MoneySavingExpert, where he ran their home services comparison business, of which energy is by far the biggest component.

“I’ve had a considerable lens on the energy industry from a consumers’ point of view and from a suppliers’ point of view and many of the players in this business aren’t new to me,” he tells Utility Week.

Pocklington comes into the sector at a time when suppliers are all competing on their green credentials, vying for customers who are becoming increasingly environmentally conscious and wanting to do their bit for the planet.

He began his tenure at Good Energy in May and follows in the footsteps of Juliet Davenport, an industry stalwart who founded the company in 1999.

It serves more than 271,000 customers overall with the majority (139,000) of them business customers. Based in Chippenham, Wiltshire, the company currently employs more than 250 staff.

According to the company’s most recent financial results to 31 December 2020, Good Energy had a revenue of £130.6 million and made a small profit after tax of £400,000.

Pocklington admits he finds the prospect of taking over from Davenport after more than two decades a “little daunting” due to her reputation and achievements.

He adds: “It’s quite something to start off with an idea and a bit of funding and end up with a public company with generation and assets, a supply business and some innovative developments on the side.

“That is something you’re acutely aware of. We can change CEOs but we haven’t changed our founder and Juliet is still involved in the company as a non-executive director and still has a public platform as Good Energy’s founder. I think that is to our advantage that she carries on that way.

“That said, I am a reasonably experienced executive, I have seen founders leave before, it’s the natural phase in the development of companies and often it’s helpful to bring fresh thinking to an organisation.”

While his previous role saw him work closely with the customer acquisition teams of energy suppliers, the chance to take a more hands-on approach in what he hails as a “fascinating market” represents an interesting challenge for Pocklington.

“I think it’s a fascinating market because at the base element you have got something that is a utility, that’s the name of the category and that’s how consumers by and large think about it – it’s a boring, background thing. The challenge which is fascinating is can you productise something that in its nature people think is just a boring background service?

“The interest in Good Energy is that it’s trying to pursue plans and products that help people engage much more in what they are consuming and how they can consume differently. An engaged customer will eventually be a better customer from an environmental point of view because you’re taking control of your energy consumption and from an investor point of view it makes for a better business.”

A shift to B2B?

In 2019 the company reported that it had seen a “continued but anticipated” fall in domestic customers as it targeted more businesses. At the time Davenport insisted to Utility Week that while the retailer had been increasingly targeting business customers, it was not seeking to move away from the domestic market.

What then is Pocklington’s vision for the future of Good Energy and will he continue the shift towards B2B customers?

“It’s a continuation of what we have been saying before, what we really want to do is help homes and businesses get to carbon neutrality. That means in the way that the energy they consume is sourced but particularly to support the adoption of carbon neutral transportation and eventually heating solutions.

“That to me says we are likely to be very heavily focused on early adopters in the domestic market. And we are going to be particularly interested in supporting individuals and businesses who look to generate as well as consume energy.

“So there are a couple of very interesting niches there which Good Energy has historically played quite well in and we can continue to build our services for. It’s too early to say whether that means it’s more of a B2B focus still, but I think the vision is enabling homes and business to be carbon neutral and we will play where we can best affect that vision.”

Pocklington joins the sector as discussions turn to what the forthcoming retail strategy, which follows on from the government’s white paper, will entail. A key area listed in the white paper was the prospect of opt-in/opt-out switching as a way of tackling the loyalty penalty.

Like many of his colleagues in the sector, Pocklington is not an advocate of automatically switching customers over to different tariffs or even suppliers.

“Automatic switching is a barrier to investment and it is also administratively a far bigger task than anyone gives credit to,” he says.

Pocklington believes there is a real risk from the autoswitching proposition that problems will arise such as customers being unclear who their supplier is. For him, it’s an intervention too far.

“The better solution is to encourage a pretty vibrant market for customer acquisition and then encourage companies to develop products and services that justify the prices they charge. There is less of a loyalty penalty now, after the SVT cap, than there was before,” he adds.

Continuing the crusade against greenwashing

His predecessor has a reputation for being a vocal critic of what she perceived as bad practices in the sector such as greenwashing and suppliers providing unsustainably cheap tariffs. Pocklington is already proving himself in the Good Energy mould.

He recently penned a blog which heavily criticised rival Bulb’s green energy credentials, claiming 96 per cent of the company’s fuel mix was greenwashed.

Says Pocklington: “I think that that whilst the reason we have got here is rooted in good intentions, greenwashing is a considerable consumer protection scandal. You have got to a place where the majority of tariffs being offered to UK domestic consumers claim to be green, yet we know that only roughly 40 per cent of our National Grid’s generation is from renewables.

“So there’s something missing there yet I suspect consumer awareness is very low.”

Responding to the Good Energy chief’s claims, a Bulb spokesperson said: “We think it’s important people know where their energy comes from and we’ve always been transparent about our fuel mix, which is 100 per cent renewable. Getting to net zero is a huge global effort and we don’t think it’s as simple as debating PPAs (power purchase agreements) and REGOs (renewable energy guarantees of origin certificates).

“Taking energy efficient products mainstream will be essential to help the UK reach net zero. As well as providing affordable, renewable energy to our 1.7 million customers, we’re building technology that will transform how we use energy. And we’re a B Corp, which means we meet rigorous standards of social and environmental impact.”