Pure Planet co-founder – “The purpose is for people to think renewables first”

“The purpose is to get renewables well embedded into the UK, and for people to think renewables first.”

From fitness to banking and even dating, it seems that in 2019 there is truly an app for everything – and it is with this philosophy that Steven Day wants to bring energy retail into the 21st century.

The amiable and enthusiastic co-founder of Pure Planet meets Utility Week at the app-based supplier’s Bath office. With a neon logo on the wall, and staff standing rather than sitting at desks, it’s a look that befits a modern brand.

Backed by BP, Pure Planet is a new supplier that has emerged in a tough energy market. The sector has recently been rocked by the dramatic exits of fledgling suppliers, often due to financial difficulties arising from a lack of capital.

Yet Day has a clear vision of where his company is going and knows all too well the importance of learning to walk before you can run. “We are not falling over ourselves too fast, too soon. We’ve only got one product really, there’s only one tariff, it’s electricity and gas and that’s it, it’s consumer only,” he begins.

Pure Planet was launched in 2017 by Day, Andrew Ralston, Chris Alliott and BP, which has a stake worth just under 24 per cent of the business. The burgeoning company is a renewable energy supplier that is completely app-based. It has so far garnered more than 100,000 customers.

A veteran of the telecommunications sector, Day’s past work involved setting up Virgin Mobile, which listed on the London Stock Exchange in 2004, doubled its share price, and was sold to NTL in 2006 for just under £1 billion, when it became Virgin Media.

He went on to become chief of staff, brand and communications at Orange in 2008, which he helped merge with T-Mobile in the UK. In addition he led the creation and launch of the EE brand in 2012 – the largest mobile business in the UK – and the decommissioning of the two former brands.

Pure Planet is, for the moment, a “very simple ­business”, he admits. That said, he clearly feels there is scope for the company to delve into more opportunities over the course of time.

Day is brutally honest about where he believes his company is at the moment and where he wants it to be. “We’re not yet doing anything with the business market but that’s a possibility, we’re not yet doing anything with regards to battery technology or storage, we’re not yet doing anything with blockchain or solar panels.

“There’s a load more stuff that we know we could do but for now we have been very single-minded and focused just on the very simple products and gaining a lot of ­experience as we have built out over the past year or so.”

Mission

In a world where sustainability and climate change are some of the more salient issues, it’s clear Pure Planet is on a mission to reflect this. Furthermore with an app-based supplier it’s unsurprising that “differentiation” is perhaps the word of the day and it is through this differentiation that Pure Planet hopes to achieve its goals.

“The aim is to create the largest, for purpose, sustainable, most recommended green energy supplier in Britain. The purpose is to get renewables well embedded into the UK, and for people to think renewables first,” Day continues.

“When we set about it, we thought digital is definitely the way forwards. We had that thought, clearly, because of our telecommunications background. We do believe that very strongly.

“We felt there needed to be the proposition differentiation and there needed to be enough financial capability in the business for it to be able to grow, and to be secure in that growth.”

Branding

In a world dominated by social media platforms, Pure Planet put a lot of thought into the branding of the business; in particular, how brands can quickly become exposed to their own flaws.

“Sometimes, when you are on the receiving end of criticism, it’s tough because it’s so easy to criticise now. What that has meant in practical terms is that brands are much more other people’s, they aren’t yours – you put something out there and then what it becomes is what other people make it.

“We felt there is no point trying to create a brand and blast that into the world, you’ve got to try and bring ­people with you.”

The supplier recognises that society is becoming increasingly used to using automated systems to ask questions about services or products. Furthermore, Pure Planet understands that the 21st century consumer does not always want to be on hold to a call centre and would much rather resolve issues at the touch of a button.

Pure Planet’s customers can pose any questions they have to the supplier’s friendly neighbourhood robot, or WattBot, as it is known.

While the use of robotics and artificial intelligence in customer service is more commonplace than ever before, Day admits there have been instances where customers did not trust the answers the “robot” was giving them. The consumer didn’t trust the robot and needed reassurance from a person; that’s falling away as time has passed.

“We’re not the only ones to be using a chatbot, by any stretch. As a society we are getting used to automatic replies to queries when you post it to a website or an app. If you need a detailed account query, obviously the robot can’t deal with that and you need to be dealt with by a person. That’s broadly how it works.”

While apps for a variety of things may be commonplace today, Day is not naive and understands that this method of communication is not to everyone’s taste.

“Not everybody likes it and it’s not designed necessarily for those that aren’t used to, or comfortable with, being digital orientated. We know from research and we know from other sectors that apps at the moment seem to be the way it’s going. What they provide is an immediacy and an intimacy that you don’t get in any other form of electronic relationship.”

Drawbacks

While being app-based is a good differentiator in today’s market, it can have its drawbacks, as a recent case involving Citizens Advice highlights all too well.

In March, Pure Planet accused the charity of using “arcane and potentially flawed methods” to calculate its star ratings for energy companies, after the supplier was ranked fourth from bottom.

The company scored zero for ease of contact as the supplier did not offer customers a telephone number. But Pure Planet argued that its app offers customers 24-hour care through its chatbot and calls customers “when needed”.

Understandably, Day feels frustrated with how the star ratings table was calculated; after all, the company’s business model caters for people who do not wish to spend their time on the phone if an issue arises with their supply.

He is keen to emphasise that the company does have structures in place to help those who are in need. “Many of the very few instances we have had have been dealt with anyway. We ended up in this protracted debate about what technology to use.”

Following this interview, Day confirmed that Pure Planet had held “constructive discussions” with Citizens Advice and that an outcome had been reached. A “hotline” between Pure Planet and ­Citizens Advice has been put in place should the charity need to contact the supplier with customer issues.

Day explains: “In subsequent energy advice star ratings, Pure Planet will be better represented, and we welcome Citizens Advice’s intent to review how digital service propositions could be scored over time.”

Finance

With his strong background in business, it’s unsurprising that Day and his co-founders looked at how other newer players had entered the market and, in some cases, made a swift exit shortly afterwards.

“When we looked around just before we launched, we could see others that launched with a lot less capital than we did. They were bootstrapping; that appeared to be a relatively easy way in, to get the market presence and to start to grow.

“If you haven’t got enough money when you are setting up a business, it’s really hard to make it balance every day. I think that’s what has caused ­problems for others and it certainly was in our minds that we needed an investor that could also potentially be a strategic partner, which is why BP was selected.”

Day insists BP was selected as a company that both understands and has the financial capability to make an investment of the kind that provides financial security.

A minority shareholder, BP buys all the renewable electricity and carbon offset gas on behalf of Pure ­Planet’s customers, whom it refers to as its “members”.

The company’s start-up capital remains confidential.

Pure Planet is not the only company to have the ­backing of a major oil giant. In March it was announced that Shell had rebranded First Utility as Shell Energy Retail, revealing it had switched more than 700,000 British homes to 100 per cent renewable electricity.

With three decades of experience under his belt, Day is a man with strong convictions who is more than happy to take his time when building up new businesses.

It is clear that his background in telecommunications has geared him up perfectly for a leading role in energy retail today. The industry will surely continue to watch Pure Planet with interest.

Smart meters

Entering the market in 2017, Pure Planet was late to the smart meter party, but the supplier certainly wanted to hit the ground running where second-­generation (SMETS2) meters are concerned.

Instead of opting to begin its smart meter journey by installing potentially unreliable SMETS1 meters, Pure Planet opted to install SMETS2 devices instead.

The national implementation of the meters has not been without problems, and severe ones at that. Day is keen to share his thoughts on the rollout.

“It’s frustrating in a word, frustrating for the industry, frustrating for the consumer, it must be frustrating for the government because it’s not fulfilling what they said. It’s been hard work I’d say.

“I find it perplexing and, speaking personally, the more I got to know about the smart meter rollout, the more astonishing I found it.

“There’s no consistency in terms of technology, there’s no consistency in terms of the story, in terms of what’s told to the industry about when things are going to be delivered; it’s been very frustrating to see.”

That said, Day says he is “pleased” that progress is being made and thinks it will be worthwhile once the mass take-up of smart meters is complete.

“It will make everybody’s life a lot easier. I think there’s a lot of consumer benefit, there’s certainly energy efficiency benefits depending on which study you look at, and that can only be good.

“I think it will also provide educational benefits as well in terms of how people use energy over time. That will increase as technologies improve.”

Price cap

Another recent addition to the energy retail sphere is the introduction of a price cap on default tariffs, something Day asserts Pure Planet was “against from the beginning” and akin to using a “sledgehammer in trying to crack a nut”.

Ofgem has argued the cap will protect 11 million so-called vulnerable customers from high prices.

“Arguably it has not suppressed switching but it is not stimulating switching from those 11 million that are still on those high tariff rates,” Day says.

Specifically, he disagrees with the way the cap is calculated, with the methodology taking into account wholesale costs months in advance.