Industry Expert Interview Series: A glimpse into the future of energy sales?


Industry Expert Interview Series: A glimpse into the future of energy sales?

Exclusive interview with Bjørn Bekkevold, CEO and founder of XTN Group, Norway. Bjørn Bekkevold will be speaking at European Utility Week 2013.

Clearly you feel there are many opportunities still to exploit where energy pricing is concerned. Can you say a little bit about your views on this?

The energy business is currently undergoing a paradigm shift, as have multiple industries before it in recent years. The EU is mandated to fulfill 4 key areas of liberal exchange: on the flow of capital, labour, services and goods. In addition to this is the EU Commission's decision of 5th February 2011 where they regulated that all countries shall have smart grid. The same obligations must corresponding national regulations fulfill. Yet in spite of the rhetoric on promoting open and fair exchange, smart grid operators continue to act in accordance with their own interests and flout the four ‘freedoms’.

The only way to meet these regulations is to give the consumer liberty to choose between different forms of energy at the household level based on personal priorities of type, price, environmental impact etc. One might draw the analogy to consumers’ natural liberty to choose their food choices from the local grocery store.

What is the particular proposition that XTN offers?

XTN Group is a vertical integrated chain store at household site with selected producers as co-owners, offering consumers all energy forms available at the individual household level, engaging the consumers to make their preferred individual choice based on a number of defined parameters: price, quality, environmental concerns, climate change etc.

The unique value in this is to give the consumers the right to choose energy form in accordance with their personal criteria whether it is environmental concerns or price or whatever is most important to him. Producers have the possibility to transmit price levels obtained at household site to the co-owners upstream prices. Net operators/distributors have help in balancing the grid by balancing the peak loads in the grid. This is particularly helpful considering the changing nature of energy supply, with renewables, loss of atomic balancing power, and too little capacity in overseas electricity cables with hydro power etc.

Besides this, of course, what XTN offers accords with the principles enshrined as the ‘four liberties’.

How do you feel your business proposition could change the nature of energy pricing?

What is very clear is that energy sales are in turbulent flux right now with no clear indication of how the long-term future may look. Fracking, LNG import from US, renewables, green certificates, the closing of atomic plants, ocean cables transporting electricity, environmental issues are each doing their bit to shake-up the system.

The IEA, in its ”Medium-Term Market Report 2013”, last month predicted a drastic reduction of gas demand in Europe over the next 5 years due to lower economic development and lower use of gas in electricity production. Coal is much cheaper to use and is in abundant supply from European sources and cheap US import due to price and carbon quotas. This creates high uncertainty for the environmental situation and revenue streams in short, medium and long term. The Big 4 are in trouble (E-On, RWE, Vattenfall, EnBW) having begun to mothball highly efficient combined-cycle gas turbine power plants commissioned this decade.

Tension is now building rapidly from this inbalance. The first to ”puncture the ball”, will be the one who grasps the opportunity to become the major energy player in the new paradigm energy market…

Could XTN provide a clue as to how that future industry model will look?...

The End-User Engagement programme offers a strong selection of DR-related and dynamic pricing-oriented case study presentations from around the world. For a closer look at the End-User Engagement programme, click here