The UK utility sector is a competitive area, and one that has seen a large number of casualties in recent years as smaller suppliers struggle to keep up with obligations and compete against the established giants.
But there remains a huge opportunity in the sector, according to founder and CEO of Rebel Energy, Dan Bates. The challenger brand is set to launch later in 2021, drawing on the extensive energy background of Bates, and the rest of its team including Ecotricity and Tonik veteran Mark Neveu.
Bates – who previously worked at BP for 17 years – officially announced the creation of the company back in August 2020, as it partnered with software company Blue Prism to leverage its automation platform to reimagine complicated industry processes.
Having seen companies come and go, whilst the energy transition picked up pace during his time at BP, Bates developed a three pronged approach to starting Rebel: targeting operational excellence – with a strong emphasis on automation – cash management and brand.
Current± caught up with Bates to discuss the challenges and the opportunities of launching a supplier in the UK, and what this “Rebel with a cause” will look like.
Digitalisation seems key to Rebel, but how much of your systems are you building from the ground up?
Quite a large portion. We are looking at every single process we do. That could not only be your operation processes, but even HR processes, financial processes and the first question we've got is, do our systems seamlessly talk to each other? If they do then great, if not, how can we automate that process? And what would that look like? So we're starting to build that now.
With any business you have lots of processes, so that's going to take time to get through but we're building from there up.
It's very much that we're taking a deliberate path, and we're making choices around prioritisation on that path as well. We're not saying everything's going to be automated on day one- it's not. But we're going to automate the ones which are high value, and also reduce risk.
Could you tell me a bit about what being a B Corp means for Rebel?
Absolutely. Benefit Corporation is a movement of companies who are trying to standardise the approach to business, making big business good business, or even just any business good business. So typically companies are set up to make profits, that's it. B Corps say we're more than profits, we also look at all the other impacts we have.
There's lots of requirements in that which you need to build from bottom up. Bulb – which is already a B Corp – is doing it, but we're looking to get a next step ahead of that. We look at processes, and there is the key process of bringing people on, but it's also how do you treat people as well.
That is part of the B Corp stuff, and that is ingrained in everything. It's absolutely key for us to get that right.
Are there any challenges that you're anticipating as a new player in the utilities sector?
I think as always with any consumer brand, it's engagement. How are we engaging consumers? Do consumers buy in? We know from conversations we've had and internal research that there seems to be a real desire for someone like us to come in to the market.
I think there's also just the broader industry challenges in the sense that we are acting as a broker in the middle, and there's lots of things that can go wrong that are outside our control. A consumer doesn't really care- they'll look to us if it goes wrong, and it might not be our fault. It might be Elexon, it might be Xoserve, it might be all these other partners, so we need to make sure that we're transparent in what we're doing.
That's the other thing- transparency is going to be key for us. Things do go wrong, and I think people can accept that. It's how you communicate that to them.
Those are the two key ones, really, but as with any sector there’s a high proportion of new businesses that fail in the first five years. You always have that hanging over you as well, but I really think and I really believe that we've got the right model here. We're building stuff from the bottom up, which is really going to be impactful, and mitigate those risks.
How big is the opportunity in the energy sector? Whilst there's a lot of casualties, there's a lot of people also clamouring for a space in it.
I think it's huge. Every household in the UK needs energy, that's how big it is. I think the difference in this space compared to something like food, where everyone also needs food, is that in the energy space everyone sort of poses the same offer- it's a level playing field. It's about how you then start to differentiate yourself in efficacy.
For me, clean energy I think is a given. To begin with you are hindered as you're not big enough to buy anything other than REGOs. But for us we're on a journey for full traceability, and there's only - I believe - Ecotricity and Good Energy who can say they've got that despite all of the hundred percent renewable claims.
So we see a big opportunity in not only supplying renewable energy, but actually appealing to people who want positive brands, not just the energy, and to buy into something which they know is doing good for someone down the road.
Now, price is obviously a key thing. It is price sensitive, but I would hypothesise that, while price is important, you don't need to be the cheapest.
What are the next steps to get you guys into the energy market then?
So we're looking at entering in early Feb, in the backend of this winter. Then obviously, you've got a two or three months procedure with getting the processes right, while talking to Ofgem and then full market launch in spring 2021.
We're really gaining quite a lot of traction and interest already, especially in the industry and elsewhere in terms of partnerships. We want to be the biggest supplier in the UK. I mean, it's ambitious but we want to do it and also show that big business can be good business. I think that's really a part of what we want to do and achieve.