Even if the supplier is focused on another market area than the distributor, I am sure that necessary steps must be taken to head forward in the digitalization and intelligent metering direction. This is a topic that MET România Energy, as supplier of electricity and natural gas, treats with maximum seriousness.
At local level, we have the opportunity to work with intelligent persons, professionals who organized in start-ups to offer extraordinary solutions. I am talking about companies that are at the beginning of the road, that have already come with concepts that are now monitored by great names in the field. It is true that, generally, it is a little harder for start-ups to find their ways to great projects that prove to be applicable. This is why we undertook to support them, understanding that, eventually, as supplier, distributor or regulator, we are all interested in answering clients’ needs. An example is our program through which we started to introduce different forms of intelligent metering at industrial consumers’ level.
Improvement of client education and sophistication level
By paying attention to the client, we see that an improvement of the information and education of the client is absolutely necessary. And this is a role we must undertake.
There are so many discussions about digitalization, some of us even act in a concrete manner, but, at client level, there is often no concern in this respect. Moreover, the client is focused on immediate costs of the investment, immediately sees the temporary discomfort in current activity, but it is difficult to understand the benefits of an intelligent metering solution.
Consumers were left behind as concerns the understanding of market trends and opportunities they have. The fact that the impact of energy prices was a reasonable one for many years did not encourage them to get informed, to research and invest in consumption management solutions, for example.
Prices increased very fast lately, but we are still not seeing a proper understanding and favourable positioning of clients. At this year’s mid, in June, we have sent a letter to the over 2,000 clients we have, asking them, by the end of this year, to contract the need of energy for the next year. From the over 2,000 clients we only received 10 answers! Now, when contracts are being renewed, most of them are terrified and try to get lower prices, which is so much difficult to do.
A better education on market prices might have encouraged them to contract the energy in advance, as recommended. The price difference now (November 2018, e.n.) compared to February 2018 is of 60-80 lei per MWh, an increase that strictly reflects market conditions, and not MET’s profitability.
Only vertically-integrated companies will survive
I don’t think in the future price will return to how they were an year ago, for example. As supplier we succeeded in absorbing a part of the shock through the balancing activity. Since 2017, when we developed our own department as party responsible for balancing (PRE), we came to occupy the second position on the market. Thus, we can offer our clients a price decrease margin.
There is also another important potential, through intelligent metering, and here we need a better collaboration between beneficiaries, distributors, suppliers and the regulating authority. I am thinking at a method through which involved parties could have access, under certain circumstances, to intelligent equipment, installed by the distribution operator. A parallel action of the supplier is a waste of resources. Given that intelligent metering investments are made, with special efforts, and investments are seen in rates, a wider access to such equipment is necessary, because having instant information is one thing, and collecting it from the distributor is another. The chain of values connecting the producer, supplier, distributor and client under the supervision of the regulating authority must allow closer connections between all participants, so that to eventually turn into benefits for the client.
I’m sure that a serious supplier, who intends to stay on the market for a long term will not survive by only providing supply services. In 2005 we were the first operator who added natural gas supply to the power supply; this is a general approach now. Then energy services came along, which also became general, in different shapes, in different packages, at the level of the entire market.
I take caution and anticipate that it will take longer than a few years for electrical mobility to become sustainable from economic standpoint and reach a critical mass and occupy an important position within companies’ budgets. At the same time, MET România Energy, as a supplier, is interested in and follows this trend. We have already started collaborations for the infrastructure of electrical vehicles and have obtained real results in this area, as well.
Now is the time to integrate production capacities with the supply activity for a vertical integration.
Considering this year’s extended portfolio of customers, with one of the greatest market share increases, MET România Energy plans to achieve two flexible co-generation production capacities, based upon natural gas and renewables. As concerns cogeneration, we already have a feasibility study, which identifies certain possible locations. The building of an installed capacity of 60 MW should not last longer than 18 months, maximum two years, including all the paperwork requested by authorities.
Thus, the supply activity, production activity, intelligent metering and all other types of energetic services may ensure a high-quality service to consumers.
This interview firstly appeared in the printed edition of energynomics.ro Magazine, issued in December 2018.
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