Communicating a Green Energy Value Proposition

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Landsvirkjun is Iceland’s biggest power generation company, generating over 70% of electricity in the country. There has been a lot of changes in the Icelandic power market and Landsvirkjun has moved from focusing on low-cost electricity buyers market to a more balanced seller’s market, offering competitive prices.

The company offers 100% renewable power on the wholesale market, having only a few customers, meaning that their branding and image building is a bit different from other traditional power companies. It is, however, important for the largest power company in Iceland to deliver a clear message to their stakeholders (the company is owned by the Icelandic authorities) and their customers.

Landsvirkjun’s mission statement is:

Landsvirkjun’s role is to maximise the potential yield and value of the natural resources it has been entrusted with in a sustainable, responsible and efficient manner.

The role of the company has changed in the last years. Instead of focusing on growth and creating new jobs, its focus is today on more value creation than before. The energy transition and the way renewable resources have become more valuable for end consumers has enabled Landsvirkjun to focus more on the Green value proposition.

Empowering the energy customer

One of the major challenges utilities face is getting the consumers to trust them. Eggert Gudmundsson has an interesting background, after receiving an MBA degree he worked for several years for Philips before returning to Iceland to become the CEO of the countries biggest fishing companies and then became the CEO of Iceland’s biggest fuel and retail company. With this background in commodities, electronics and finally energy, Eggert is now heading the innovative energy enabler eTactica which has developed an EMS for SME’s. The eTactica solution enables energy companies to create tighter bonds with their customers and adds measurable value to their services.

 

Can the incumbent utility brand itself green?

Jim Rogers, the retired former CEO of Duke Energy was the first CEO of a major utility to address environmental issues and once named by Newsweek as one of the “50 Most Powerful People in the World”.

In his presentation at the Green Energy track at CHARGE 2016, Jim talked about the customer relationship during the transformation of the Power Industry in the United States.

Duke Energy has the reputation of being affordable, reliable and safe. No one would say that they were green, they were the highest contributors of Co2 in the United States.

You can’t brand yourself unless you walk the talk.

Duke Energy has cut down Co2 emissions by almost 30 per cent but Jim admits that although the number seems high and the amount of emissions cut is quite large, the company is still a major contributor of Co2 emissions in the United States. For the effort, the company has been on the Dow Jones sustainability index for eleven years.

Branding: it’s not what you say about yourself, but what others say about you.

In addition to cutting down emissions, the company has made some considerable investments in wind and solar as well as investing in solutions that provide customers with rooftop solar.

The key point in adapting to and investing in green technology is to be able to communicate with and educate different stakeholders. The customer expects affordability and the investor want to see that the company will see a return on their green energy investment.

As Jim put it, the company invested in where the wind blows and the sun shines as well as looking at opportunities where the regulatory environment is favourable towards green investment.

 

 

 

The sustainable energy brand

When preparing for his presentation in the track on the branding of sustainable energy, search engines turned Ayoola Brimmo to the CHARGE website. In the introduction of the presentation, he noted that this was the only place to discuss how to successfully brand sustainability.

A brand needs to take a look at the past to be able to build towards the future was the key point to take from Ayoola Brimmo’s lecture at CHARGE 2016. Ayoola works at the Nordic Innovation hub in Abu Dhabi and used the case of Dubai as an example of a city brand that has become more valuable due to a strategic brand building that focuses on the perception of luxury. Another example of a city brand that has been developed in the Emirates is Masdar City. When Dubai is the luxury city brand, Masdar takes footing as a luxury brand but goes further to differentiating itself by focusing on the sustainability of the city. Even though sustainability has become sort of a buzzword in the last decade, Masdar has yet to become a city brand with a worldwide recognition.

How to be the green brand in a 100% renewable market

Iceland is one of the few countries in the world that can boast of having all of its energy generated from 100% renewable and sustainable sources. Electricity is generated from hydro dams and geothermal plants and almost all hot water comes from geothermal sources.

Green energy has been the most popular differentiation tool for retailers in liberated markets for the last decades. For a retailer in Iceland it can be a challenge to be perceived as the green brand. Áslaug Thelma Einarsdóttir, managing director of marketing at ON Energy gave insights on how the company met the challenge of rebranding and positioning itself as the leading sustainable brand.

The Role of Branding in the Retail Energy Sector

One of the more interesting energy brands to hit the retail energy market in Germany is Shell PrivatEnergie. The company behind the brand is the UK’s largest challenger to the Big Six, First Utility. First Utility entered the market utilizing one of the largest known brands in the energy world, Shell – with over 100 years of brand recognition in the German market and around 2.000 retail outlets. The German market has over 1.400 electricity retailers and is one of the most active energy markets in the world.

Maik Neubauer, CEO of First Utility in Germany is responsible for the Shell PrivatEnergie offering and participated in the Understanding the Energy Consumer track of the conference. He went over the Shell case; which elements of the brands were transferred to the electric energy brand and how to create a credible quality energy brand that is trusted by the energy consumer.

 

Iceland: EURO2016 most valuable brand

Wanting to win the European cup describes a small mentality. The UEFA tournament is of course the silly season for the real thing – the World Cup in two years. Sour grapes aside, it is last chance to jump the Team Iceland bandwagon before it comes to a halt – let’s see how we can look at the Icelandic football team in terms of brands and branding. This year’s fan favorite team has some things in common with successful brands.

„When you are only No. 2, you try harder. Or else“

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It’s often harder to be the best, you are on top and the only way from there is down. Being the underdog means that you have everything to win, competing against Iceland has meant that you are at best defeating… Iceland. Avis recognized that it was a strength by being number 2 and used it as a part of their positioning. It’s often easier to compete when you can gain a position rather than defending it.

Customer engagement

A great brand does not have customers – it has fans. A sports team has fans but they are quick to turn against their teams if they disappoint.  The Icelandic team makes the effort to engage with their fans. Before every match, the coach meets with the fan club to go over the starting 11 (before it’s official) and how the team will approach the game. After each match, the players give applause to the fans and cheers with them. By doing that, the team recognizes the importance of their fans.

Brand identity

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A brand can choose its identity and it can even assume a country of origin or decide to be without one. The country of origin part is difficult when a national sports team is the brand in question. Brands can often refer to their heritage. For the Icelandic team, there is of course no direct brand heritage in relations to football. For a brand without a heritage, there is always the option of finding indirect connections for a brand heritage. The Icelandic team gets associated with their presumed Viking warrior heritage. That association is perfect for a contact sport; fearless warriors that keep on fighting against all odds; it is OK to win the battle but the real champions and best warriors are chosen by Odin to die in battle and ascent to Valhalla to fight among legends. The team appeared to be a band of berserker brothers fighting for honor, tattooed, bearded and long hair.

Good results require years and decades of hard work

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This point is not branding specific but important for any brand. Being successful requires hard work. Forget the legend of warm and cozy indoor soccer halls with artificial grass that are supposed to be integral for the development of Icelandic football players. Most players in the team could train on 3rd class artificial grass once a week during the winter. The only indoor facilities they could train on were meant for handball or horses. They would run outside in rain, frost and (always) against the wind. They would develop their sliding tackles skills on gravel fields made from crushed lava. Success does not come easy and sometimes success is the result of years of plucking sand and small pebbles from a bleeding ulcer after a great tackle.