AGL Energy signs partnership with technology firm Kaluza
SYDNEY, AUSTRALIA: AGL Energy Limited (AGL) has announced a strategic partnership with technology firm Kaluza to revolutionize its customer operations. This collaboration marks a significant milestone in AGL’s Retail Transformation Program, aimed at enhancing customer experiences, slashing operational costs, and expediting product delivery to the market.
Kaluza’s innovative platform, known for digitizing energy billing and streamlining service costs, will be instrumental in AGL’s mission to connect customers with a sustainable future through electrification. The technology, which currently manages over 6 million meters for OVO Energy in the UK, will now be implemented across AGL’s consumer base, affecting 4 million consumer electricity and gas customer accounts.
The Retail Transformation Program is set to commence financial benefits starting FY28, with anticipated annual pre-tax cash savings of $70-90 million from FY29. This initiative builds upon AGL’s existing ties with Kaluza, following the successful migration of OVO Energy Australia’s customer base onto the Kaluza platform in 2023.
AGL’s investment in the transformation is substantial, with an estimated $300 million allocated over four years for the residential and small business customer solution component. This budget covers program management, customer migration, systems integration, and updates to supporting platforms.
Furthermore, AGL is reshaping its operating model to provide customers with seamless experiences, supported by dynamic and empowered teams, all underpinned by Kaluza’s technology. While this phase does not include AGL’s Large Business customers, the company is exploring further transformation options for this segment.
In a bold move to support Kaluza’s growth, AGL is investing approximately AUD$150 million in the form of preference shares, securing a 20% direct interest in Kaluza. This investment grants AGL a voice in Kaluza’s strategic direction and potential shareholder value as the company expands internationally. The completion of this investment is anticipated later in 2024, subject to standard conditions.
AGL, a stalwart in the Australian energy sector for over 185 years, is committed to simplifying and demystifying energy and essential services. With a customer base of approximately 4.3 million, AGL is not only the largest private electricity generator in the National Electricity Market but also a pioneer in renewable energy investment, steering the industry towards a low-emission, cost-effective, and intelligent energy future.
AGL CEO Damien Nicks said, “This represents a significant milestone in our transformation journey to connect more customers to a sustainable future. Our world-class technology, enabled by Kaluza and alongside other industry partnerships, will allow us to develop a future suite of simplified products that will seamlessly integrate into the lives of our customers and improve their experience. This will be complemented by a streamlined operating model to help us deliver superior speed to market and a reduction in costs.”
“The technology market is changing materially with the emergence of new core utility platforms offering greater flexibility and speed, which makes it imperative to partner with industry leaders, and is why we have chosen Kaluza.”
‘‘OVO Energy Australia has experienced strong customer growth, with all customers migrated to Kaluza in 2023 while achieving a Net Promoter Score (NPS) of 40+. As a result of the OVO Energy Australia investment and our proposed 20% equity interest in Kaluza, AGL has strengthened its relationship with the OVO Group which will enable us to accelerate our strategic ambition to support customers as they decarbonise and electrify.”
“This is an exciting opportunity for AGL and its customers. The Kaluza platform will enable new product innovation at speed, whilst at the same time materially reducing operating costs for AGL’s customer business in the future.” Mr Nicks said.
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