Calisen’s strategy will focus on the following areas:
Deliver contracted growth in the British MAP segment
Calisen’s strategy is to grow its base of revenue-generating meters and continue to provide its existing customers with excellent services. As at 31 March 2020, Calvin Capital’s contracted installation pipeline for MAP contracts, based on management estimates, was approximately 6.4 million meters. As the nationwide roll-out of SMETS2 meters accelerates, Calisen continues to convert its contracted installation MAP pipeline into revenue-generating meters.
In order to support its strategic development, Calisen will continue to build on the operational track record of Lowri Beck.
Continue build-out of Calisen’s smart meter pipeline
Calisen also seeks to increase its base of revenue-generating meters by winning more MAP contracts with independent energy retailers, who have been making up a growing portion of the British energy retail segment. Unlike Big 6 energy retailers, they typically do not have their own installation workforce, in which case they require a MAP which can provide an integrated service offering, including the installation of smart meters.
Approximately 4.9 million meters (or 10% of the total estimated number of smart meters to be installed as a result of the smart meter roll-out) are estimated to be uncontracted, representing a source of organic growth opportunities for Calisen.
With respect to Big 6 energy retailers, Calisen will focus on leveraging its pre-existing relationships and track record of delivery to win future contracts. With respect to independent retailers, Calisen aims to gain further share with its “one-stop shop” offering, which encompasses procurement, installation, ownership and management.
Expand into adjacent areas and international markets
As the energy and utilities sector continues to evolve in response to market and regulatory conditions, it is expected that new growth opportunities will arise. Such opportunities may include providing electric vehicle charging infrastructure, which is a fixed energy infrastructure asset similar to meters and which may potentially enjoy a supportive regulatory environment, and owning and operating batteries, which are often transferable assets in the event of consumer churn but which does not currently have the same level of regulatory support.
As it continues to age, the energy infrastructure in Britain or abroad faces technological, political and regulatory changes that will likely support and drive the emergence of new forms of energy production, distribution or storage which are all adjacencies to Calisen’s operations as a MAP. Such changes could lead to new types of energy infrastructure assets being developed, requiring significant amounts of capital to be deployed.
Calisen’s strategy towards adjacencies and international expansion is based on a set of four principles:
- Focus on jurisdictions or business segments where the regulatory regime is amenable to Calisen’s ownership and operation offerings and business model
- Focus on small-scale, high-volume, energy infrastructure assets consistent with Calisen’s current strategy
- Focus on a combination of both funding and managing such assets
- Focus on an approach that emphasises partnerships with other players in the asset’s value chain, such as manufacturers and / or energy retailers
Calisen continues to monitor developments in Australia, Germany and other jurisdictions, but remains disciplined in its approach and will only pursue international expansion if it offers sufficient scale, profitability and regulatory stability.