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A Cambrian explosion of distributed energy in Texas

Texans can now get paid for supporting the grid with their solar panels and batteries as part of a new virtual power plant pilot. What happens next could lead to the rapid deployment of resilient and clean distributed energy resources across the state.

Texans can now get paid for supporting the grid with their solar panels and batteries as part of a new virtual power plant pilot.

What happens next could lead to the rapid deployment of resilient and clean distributed energy resources across the state.

But realizing that potential won’t be easy. One of the biggest hurdles is customer engagement.

Octopus Energy US CEO Michael Lee joined the Texas Power Podcast to discuss his extensive background in energy, his company’s participation in the VPP pilot, and his vision for bringing the benefits of distributed energy to the masses.

Octopus, an energy retail company, is working on cutting-edge, transformative approaches for engaging customers and delivering them energy-efficient and cost-saving outcomes. Lee spoke about Octopus’s efforts to rebuild trust with consumers – who have developed significant mistrust towards retail companies from years of predatory behavior – and to work with them to increase energy savings and reduce costs. 

Michael provided the podcast with an in-depth understanding of the old (though still the predominant) business paradigm and new, developing business paradigm for retail electricity providers – coining this dynamic Retail 1.0 and Retail 2.0 (8:05). Lee detailed how Retail 2.0 companies like Octopus are moving away from a model of gaining profits at the expense of the customer and instead focusing on selling and then delivering outcomes to the consumer related to the Three C’s: “cost, carbon, and comfort” (9:18)

Automation and communication also served as major topics during the discussion.  Michael spoke on how the average customer doesn’t necessarily understand the work of energy retailers and thus retailers need to meet consumers where they are in both communication styles and services provided (19:26), and he detailed some examples of how Octopus is doing so. 

On Winter Storm Yuri and market reforms, Michael delved into how many of the current actors in the debate are focused on increasing profits for large generators, rather than improving costs and experiences for consumers, and also provide suggestions for impactful reforms to the Texas Grid (35:05).

Other topics discussed included examples on how Octopus is actually reducing costs for consumers (23:27); how older technology at retail companies are inhibiting a smarter grid and innovation (27:55); on net metering, batteries, and scaling solar storage and grid penetration (29:45); the Texas affordability crisis and natural gas (41:16); and the importance of energy efficiency during extreme weather events events and how Retail 2.0 is more suited to bolstering efficiency improvements (44:20).

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