Paolo Bevilacqua, the chair and general manager of Real Utilities, explains how their ‘business model’ is helping them realise the triple bottom line by delivering sustainability, economic and customer benefits.

Amidst rising oil prices globally and Australia’s energy crisis that’s seeing spikes in both cost and supply issues, this Australian company is using a unique energy retailing model to deliver cheaper and greener electricity to homes, retail businesses and industries.

In a span of just five years, Real Utilities has gone from two operating sites to 16, and expanded their portfolio from purely residential developments to retail and industrial projects. While the company sells 100 per cent carbon neutral energy to all retail sites, two of their industrial sites employ a combination of solar PV, battery storage and diesel generation technologies. Servicing only Frasers’ developments such as Ed.Square in Sydney and Burwood Brickworks in Melbourne, Real Utilities benchmarks their gas and electricity rates against major energy retailers to ensure cheaper rates.

Impact of rising energy costs

Describing the dramatic increase in energy prices as extraordinary, Bevilacqua says they remain committed to supplying energy at pricing cheaper than major retailers. By increasing distributed generation on their sites using solar PVs and using more commercially viable batteries, they can buy less from the grid, allowing them to manage the load easily.

Bevilacqua believes Australia’s current energy crisis is the result of unplanned transition from fossil fuel based technology to renewables. The absence of a really good plan on how all that distributed energy gets integrated into the system and into the national electricity market has hindered smooth transition, he explains.

Customer insights

Under the energy law, customers can go with any energy retailer of their choosing – a decision, which is usually based on their perception of a better offer. “We spend the time with the customer to actually explain that our offer is better. Energy retailers have made it really hard by having lots of pricing plans and structures and so called deals that people don't know what they're even getting, and whether they're on the best deal or not,” says Bevilacqua. Real Utilities simplifies energy by making it cheaper and greener, and uncomplicated with a single plan.

At Real Utilities’ residential sites, the company uses Net Promoter Score (NPS) to measure customer satisfaction, which is +31; the industry benchmark for energy retailing is -9.

So if residents are happy and customer satisfaction is high, why does Real Utilities restrict their services only to Frasers’ properties?

As an organisation, Frasers Australia is still fundamentally a real estate company, explains Bevilacqua. “We develop communities and our greater purpose is to create communities where people have a sense of belonging. It's really something we're focused on in everything we do, and we see that a service to customers through energy that just cuts out all the noise is something that people need.”

Given the large-scale development going on in Australia, why aren’t developers setting up community energy hubs on their housing estates? Though cost is a factor, Bevilacqua says the bigger hurdle is around energy regulations.

“It's really important to ensure that the people that are allowed to provide energy have got the financial capacity and can provide the right customer protections. The amount of things we've had to put in place to better provide an energy retailing service is extraordinary,” he elaborates.

“It's very extensive what energy retailers need to provide because apart from the roof over your head, the next most important thing is the energy that flows into the house. I think that's been a barrier. If you're a property company, do you want to take on those risks?” asks Bevilacqua.

What does the future look like for Real Utilities?

Towards the end of 2025, the company will not only be 100 per cent carbon neutral but also 100 per cent powered by renewable energy generated in Australia (expected by January 2024). The customer numbers are also forecast to grow two-and-a-half times.

As they scale up the amount of solar and the size of the batteries, Real Utilities looks to providing services to the grid as the grid increasingly transitions to more renewables.

The triple bottom line

Frasers’ sustainable buildings are designed to lower energy usage, while Real Utilities was established to sell energy. Isn’t there a bit of tension there?

Bevilacqua explains that if the energy service is outsourced to a business running private energy networks, their main motivation would be to make money from selling energy.

“But our main motivation of having a retailer within Frasers is the kind of intellectual property that we gain from being able to operate the buildings and sell energy into them. It’s good that after we do that, the venture is also commercially viable.”

“To me, that's the kind of holy grail of a sustainability offering, if you can actually deliver the sustainability benefit and also deliver a good economic benefit to the business. Then you've got the customer kind of benefiting as well. We are probably just reaching that threshold where it is a viable business. So we can see that the triple bottom line is being realised.”

For more, listen to: https://www.buzzsprout.com/265967/11008894-episode-117-paolo-bevilacqua-general-manager-of-real-utilities-talks-about-energy-pricing-why-sustainable-energy-is-good-for-the-bottom-line.mp3?download=true

Real Utilities is an authorised carbon neutral energy retailing business established in 2017 and wholly-owned by Frasers Property Australia.

Image: https://www.moneysavingexpert.com

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