responding to gas market challenges paul adams adams.pdf · paul adams managing director . about...
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Responding to gas market challenges Paul Adams Managing Director
About Jemena
2
Gas Electricity Water
Eastern Gas Pipeline
Queensland Gas Pipeline
Colongra Gas Transmission and Storage Pipeline
VicHub
Jemena Gas Network
ActewAGL Distribution Partnership (50%)
Jemena Electricity Network
United Energy Distribution (34%)
Rosehill Recycled Water
Our market is changing…
3
Forecast gas demand for Jemena Gas Network
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0
20
40
60
80
100
120
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
PJ
Year ending June 30
Residential and small business customers (historic) Large industrial customers (historic)
Residential and small business customers (forecast) Large industrial customers (forecast)
Source: Jemena
Gas supply from a customer’s perspective
5
25% 5% 50% 20% RESIDENTIAL CUSTOMER
LARGE INDUSTRIAL CUSTOMER
75% 15% 10%
What does this mean for customers in NSW?
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1.2m customers
Responding to changes in the gas market
• Up to 40% reduction (in real terms) in network charges over the 2015-20 period
7
Small customers – promoting stability in end retail bills
8
50% 51% 57% 61% 66% 66%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Residential customer consuming 15GJ/annum
JGN distribution charge proportion of bill Non Network charge proportion of bill Cumulative change in total retail bill (real terms)
Source: Jemena
Large customers – providing stability and certainty in network charges
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10% 10% 10% 9% 7% 8% 8% 9% 10% 10%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Aver
age
pric
e ch
ange
($re
al)
Prop
ortio
n of
Tot
al R
even
ue
Volume market per cent of total revenue (left axis)
Demand market per cent of total revenue (left axis)
Average price change demand market (right axis)
Regulatory control period (2010-15) Regulatory control period (2015-20)
Source: Jemena
Ensuring gas is a competitive fuel of choice
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Provide a service that customers
value
Engage to understand
their preferences
Continue to be proactive in attracting
new customers
Natural Gas, the Natural
Choice
Put downward pressure on
prices
Strive to continuously improve our
efficiency
Reduce barriers to customer
participation in the energy
market
Helping customers get the best retail
deal
Providing a service that customers value
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• We developed our proposal through extensive engagement
• Range of customers, stakeholders and the broader community
• Engagement tailored to each cohort to maximise effectiveness
Providing a service that customers value
12
• Safety
• Maintaining current service levels
• Universal level of service across our network
Proactively attracting new customers
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0
5,000
10,000
15,000
20,000 20
03
2004
20
05
2006
20
07
2008
20
09
2010
20
11
2012
20
13
2014
20
15
2016
20
17
2018
20
19
2020
New customer connections per year
Electricity to Gas conversions
New homes
Medium density and High Rise
Industrial and Commercial
Source: Jemena, Core Energy
Our marketing strategy and creative has evolved
14
2008 LAUNCH. GAS IS
GOOD. Cost-effective, efficient, environmentally friendly message, website purely
informational.
2010 REFINE, REALIGN,
RETAIL. Maintain healthy brand relevance, co-branded appliance retail ads,
drive traffic to website.
2012 TARGET, EXCITE,
IGNITE. Expansion of the
alliance partner network, hyper-targeted
household offers.
2014 CONNECT LIKE
NEVER BEFORE. Above the line appliance
cashbacks, emotional messaging - reconnect
with your family.
2015 TURN IT ON.
Rebrand with the strongest call to action
ever. Website redeveloped to improve
customer experience and drive connections and appliance sales.
‘Turn it on’ – a sneak peek of our 2015 campaign
15 In 2015 we empower consumers to ‘Turn it on’
Putting downward pressure on prices
• We’re continually striving to improve our efficiency
• Further sharpening our incentives with the Efficiency Benefit Sharing Scheme
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Reducing barriers to customer participation in the energy market
• Providing clear information to customers about managing consumption, retail offers and available rebates
• Simplifying and providing better information about our prices
• Making energy markets ‘work better’ for customers – Deregulation of retail gas prices
– Assistance for gas customers experiencing hardship
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NSW supply security
• There are other levers to pull – supply is secure and homes won’t run out of gas
• But restrictions need to be lifted and new supply in NSW needs to be brought online to ease price pressures
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Gas transmission – responding to customers’ requirements
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Putting things into perspective
20
Gas supply
Market design
Pipelines