Frugal Energy Success Story

Neil Williams

27 Oct 2019

Tilix has helped a frugal innovator enter the GB electricity supply market.

  • Client: New entrant
  • Sector: B2B supply
  • Persona: Frugal innovator
  • Size: Micro (<10 employees)
  • Situation: Startup
  • Hired Tilix for:
    • Research
    • Licensee consulting

The Opportunity

Joining the fast-growing community of independent energy suppliers in the UK is an attractive proposition for entreprenuers. These gas and electricity markets are amongst the most vibrant and diverse in the world. Competition is shown to be delivering better deals for consumers.

New players in the market can challenge the “Big Six” with innovative value chains and a laser-sharp focus on customer excellence. The business case for delivering a competitive value proposition continues to be very strong. Not least because many of the industry complexities can now be managed with a modest budget. There are great opportunities to bring frugal innovation to the market.

The Challenge

Historically, the first key decision for a new entrant into the GB energy market is whether or not to purchase a shell company from one of the established service providers (i.e. Dyball, ENSEK, Gilmond, Seaglass, Utiligroup and Utiliteam).

However, the GB energy market is in transition. It is a critical time for entrepreneurs, service providers and regulators as the old modus operandi of setting up a supply business is being changed by Ofgem.

Fast-thinking and decisive action is needed to take advantage of the “as is” approach to entering the market because the window of opportunity closes in November 2019 when Ofgem is minded to revoke the licences of a significant number of shell companies.

Tilix Approach

A viability study leveraged first-class enterprise design and energy industry gravitas to help the client address its challenges in navigating industry technicalities. The work involved two elements:

  1. Assess business plan, partnership strategy & creditworthiness
  2. Document tactical/strategic current state

Having gained perspective through the viability study, the next step was to proceed with procuring a licensed supply business “off the shelf”. Building on the framework of the Tilix Shell Co Battlecard, the client’s route to market was addressed with focus and intensity. The two key elements of this work package were:

  1. Create a shortlist from the 20 or so options available
  2. Initiate contract with chosen vendor

Benefits

The client’s “frugal energy co” aims to serve small businesses with cost-effective solutions and customer experiences that surpass the current market, by offering a complete package of transparent tariffs, accurate readings and practical payment options.

Our innovative approach required a partner that has the skills and experience to help us achieve our goals. Tilix not only delivers energy market expertise, it is also an innovator which works at the cutting edge of the energy transition. CEO, Frugal Energy Co

Frugal innovation is based on imaginative problem-solving. In this process, the needs and context of customers are prioritised in order to develop appropriate, adaptable, affordable and accessible products and services.

It involves applying “innovative fixes” which are born from ingenuity and cleverness. It requires a culture and mindset of creative improvisation and is based on principles such as flexibility, keeping it simple, intuition and opportunity in adversity. In short, it embodies “making do” in order to come up with innovative solutions.

Learning to do more with less is the innovator’s dream. Highly regulated and low margin energy supply markets in the Western world come with a plethora of risks and resource constraints. Technologies such as the Internet, wind, solar and mobile telephony are the tools which frugal innovators are leveraging to deliver success.

New entrants certainly face barriers to entry, but they can explore and exploit ways to leapfrog over and above incumbents. These challenges offer opportunities for frugal innovators to create a competitive edge.

It is not just about reducing the cost and simplifying the customer experience. It is also a case of redesigning the value chain to operate in a resource constrained context. With help from Tilix, we can use fewer resources to compete with complex or lacklustre incumbents. CEO, Frugal Energy Co

About Tilix

Tilix is a management consultancy focused on energy, cleantech and ACES mobility in the UK and the Nordics. We understand that there is no one-size-fits-all solution, know when to use different tools and how to adapt to different situations.

Startup and SME clients leverage Tilix playbooks to develop their capabilities and deliver a more effective business. Larger enterprises use Tilix to augment their own staff. Entrepreneurs trust us to help generate ideas, find the most promising options and create tangible results.

Tilix particularly enjoys helping new energy supply businesses. Our commercial and technical expertise spanning all the critical processes including buying, selling, moving, metering and managing energy is valuable in terms of strategy, tactics and operations.

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