Lighting the way into the Republic’s energy market
Gas and electricity supplier Energia plans to enter the Republic this autumn, as a fourth supplier. So what can consumers expect?
“It’s ESB Networks as opposed to Electric Ireland. They have appropriate business separation arrangements and they are in the right place to do this as well.”
When it comes to the nuts and bolts of its plans, Thom is keeping his cards very close to his chest. But he stresses that Energia will compete on both price and service.
“We will want to be competitive against the market. You have got be price competitive, otherwise you won’t get off first base,” he says.
“People are very value conscious because of all the other demands that are made on their budgets.”
Energia already has a 37 per cent share of the small and medium-sized business market. Thom says it has built up and maintained this on the back of competing on price and on the quality of service it offers customers.
“We have done some market research with our own customers. They say to us, ‘our experience with you is really good as a supplier, we would really recommend you as a domestic supplier, indeed we’d be very keen to sign up with you ourselves’, so that’s our unique selling point,” he says.
If the group is serious about maintaining a high standard of customer service, it will have to invest in areas such as back-office and customer support. Thom says much of this will be provided jointly by Energia and Power NI.
“We already have a mass-market supply activity and it’s no secret that we have been losing share in the North because of increased competition, but that in itself frees up a degree of resources that can be applied to this without creating another new and significant overhead,” he explains.
Nonetheless, it will be recruiting new people, including 100 or so sales agents, who will be spreading the message door to door.
Along with that, there will be a media campaign and the development of a new website and apps. Gary Ryan, Energia’s Dublin-based head of retail, will be leading the charge.
Thom is not willing to say how much all this will cost, beyond stating the obvious that it will require a significant investment. Neither is he willing to get too hung up on targets.
“We have built up our position in the business market over quite a long period of time,” he says.
“We’re in it for the long term; we’re not going to say, on the basis of one year’s performance, that this or that is not enough customers.
“We address all investments, we think quite intelligently, so we try and maintain as many levers in order to allow us to adjust the level of investment to our performance.
“We haven’t so many sunk costs in this thing that we have a very substantial hurdle that we need to achieve in the first year of operation.”
The point he repeats several times is that the company is in the domestic market for the long term and it intends to carve out a significant slice of that business for itself.
But no matter how significant that slice turns out to be, this is a small market and, of the three existing players, two – Bord Gáis and the Scottish and Southern-owned Airtricity – have invested heavily in building up their position, while the ESB still has a large share. Is there room for a fourth?
Thom’s answer is clear: “We think that there is room for us in the market.”