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Prepaid electricity instead of payment on account

The alternative to advance payments and supplementary payments is prepaid electricity. The billing system comes from the cloud.

“Annnnnd....lights please!”

Through its start-up subsidiary EnergieRevolte, utility Stadtwerke Düren is bringing innovative electricity payment models to the market. A pioneering step change for the industry, enabled by T-Systems’ cloud billing.

Picture of André Jumpertz, founder and revolutionary leader of the start-up subsidiary EnergieRevolte

André Jumpertz, founder and revolutionary leader of the start-up subsidiary EnergieRevolte

Car sharing platforms such as DriveNow, smart TV leasing from electronics stores or programs allowing customers to rent baby clothing – the trend towards providing products as a service has long been a hit with consumers. “So why,” wondered André Jumpertz, "Shouldn't we deliver the same flexibility and offer a pay-per-use model too?” That was back in 2017 when Jumpertz, who hails from the German Rhineland, was working in management at Stadtwerke Düren’s subsidiary, Leitungspartner. Jumpertz’s bright idea: to enable customers to pay for electricity as they need it; when and however it suits them and in a way that avoids surprise back-payments or rebates at the end of the year.

“At the time, the idea was probably still too innovative for the public utility world,” says the manager diplomatically.  Too bold, too new, too advanced. An energy revolt, so to speak. Since time immemorial, almost all German households – currently 42 million of them – have paid for their electricity in the same way: monthly down payments and a yearly statement.

But Jumpertz didn’t let this deter him. And his employer was quite taken with the idea too. Just imagine: Stadtwerke Düren as a leading light among Germany’s 1,151 electricity providers! Jumpertz set to work with half a dozen colleagues from various departments. Their aim to design a prototype and develop it for market launch. A modern app-based product that could deliver and charge for electricity digitally and manage everything online.

The customer’s right to decide

“We believe that customers should decide for themselves when to buy how much electricity and how to pay for it,” explains Jumpertz. “And that they should be able to easily keep track of their consumption. This is the only way to flexibly tailor electricity to customer needs and not suddenly leave them in the dark.”

A driving force behind the Düren project is a statistic that appears every year in the German Federal Network Agency's annual report: the number of households whose electricity is cut off at some point because they can no longer pay for it. Last year, the figure was 380,000. As in many European countries, German households that spend more than ten percent of their net monthly income on electricity fall below the energy poverty line. “These are people who really have to watch where every cent goes,” says Jumpertz. “Being hit with a surprise back-payment of 100 euros at the end of the year can really cripple them.” And if the customer cannot come up the cash, they face being cut off from the grid plus a 150 euro processing fee. In 2019, utilities sent out 4.9 million deactivation threats nationwide. As Jumpertz observes, “90 percent of these could be avoided.” And his experience over the past two years has proved him right.

What started out as a guerrilla group became its own company in 2018. Since then, with André Jumpertz at its helm, EnergieRevolte GmbH has been a wholly owned subsidiary of Stadtwerke Düren. Its mission: to introduce prepaid electricity into the energy market on a large scale. The seven-person start-up based on the Digital Church campus in Aachen wants to see its prepaid concept accepted as a mainstream norm. “We would like it to be a standard product just like in mobile communications, shaking off the image that it is for poorer people and something to be ashamed of,” explains Jumpertz.

Push notifications warn when the power is low

The EnergieRevolte app informs customers hourly, daily or weekly about how much electricity credit is available and how much power they have used and when. Instead of kilowatt-hours (KWh), the app quantifies consumption and credit in euros, making it clearer just how much electricity is left before the lights go out.

Right from the start, EnergieRevolte customers have been using this insight to develop greater awareness of their power consumption. And it’s paying off: with reductions in electricity use and spend of 13 to 19 percent. But the most rewarding effect for André Jumpertz is “that the number of deactivations is practically zero.” Customers pay via cell phone whenever they have money, selecting from a range of payment options available in the app – from barzahlen.de for use at the supermarket checkout, PayPal or classic bank transfer.

Wider target audience

The model is a total step change for the electricity supply industry. And it’s certainly making waves. The primary target group for prepaid power is lower-income households who can now purchase credit in advance via the app. “It provides interesting insights into the realities of everyday life for many people,” observes Jumpertz. “Customers might top up a fiver today, a twenty from the child allowance tomorrow and then they have to wait for grandma to call by with 50 euros next week.” But the start-up’s customer base is expanding beyond its primary target. Students, for example, who are used to modern x-as-a-service offerings have downloaded the app, as have parents who want to familiarize their children with the concept of saving resources. If all three kids, for example, regularly nod off in front of the TV without switching it off, the app can draw their attention to their nocturnal power wastage. Before their parents do.

This level of cost and consumption transparency has made the solution a real hit. Currently, the EnergieRevolte team is fielding thousands of enquiries from up and down the country – from Aachen to Hamburg to Berlin. The latest version of the app can also handle customers who are moving house and new registrations. “We’ve been learning and evolving since day one and continue to develop in sprints,” says André Jumpertz. “We’re hoping the company will keep its innovative startup mindset for a long time to come.” What do our customers think? What are the market requirements? What have we overlooked? What’s going well, what’s not going so well? “It took us until the middle of last year to get to know our customers and processes. And we approached it in a very agile way,” recalls the EnergieRevolte boss. “And then it was a question of learning everything we needed to roll out the solution for real.”

Different city, different supplier

Picture from above shows young woman sitting, on her smartphone the app of the energy revolt opened

The number of electricity providers who want to license the app from the Düren subsidiary as a white-label product has been increasing steadily since the start – but is really gaining momentum now. EnergieRevolte is responsible for providing new electricity meters, transmitter/receiver modems, breakers and credit meters to customers and remains the main operator. Power, however, is delivered via a local supplier. This models means the prepaid solution must be multi-client enabled. “To achieve this, we redesigned the software and connected the app to the T-Systems cloud billing system, which now acts as the extended core of our solution,” says Jumpertz. In practice, electricity providers can now offer the innovative payment model anywhere while ensuring that they retain control over their customers, their data and their own pricing policy. “For this to work, prepaid services call for innovative billing systems that can process a multitude of usage data in real time and invoice it quickly, automatically based on consumption or utility value depending on the customer preference,” explains Raphael Becker, Business Development Manager Cloud at T-Systems.

Cloud-based billing

All processes – from meter display, to payment processing, to account management – are distributed in the cloud billing backend across underlying systems, including the meter cloud and the payment provider. This is where all services are orchestrated and feedback is entered immediately. Comprehensive functionality is in place to monitor system performance and manage handling of transaction data. The subscription management part of the solution, which T-Systems delivers from its Open Telekom Cloud hosted at the twin-core data center in Magdeburg-Biere, processes all customer contracts and electricity orders including status and validity. “This forms the basis of correct, accurate billing,” explains Becker.

“As you can see, there were many good reasons for EnergieRevolte to team our pay-per-use electricity offering with T-Systems’ cloud billing solution,” says André Jumpertz, summing up the first year of collaboration. For one: for Stadtwerke Düren and electricity providers far beyond the Rhineland, no more demands mean no lost revenue. “It’s a win-win scenario for suppliers and consumers,” explains Jumpertz.

And for another: “We benefit from T-Systems cloud billing as-a-service.” After all, in the corporate world, the trend towards replacing products with a service has long been an established norm.

Author: Thomas van Zütphen
Photos: Press images EnergieRevolte 

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