innogy is Germany's leading energy company.
Peter Terium has been Chief Executive Officer and Chairman of the Management Board at innogy SE since April 2016. Previously, he served as Chief Executive Officer at RWE AG. He also served as the Chairman of its Executive Board. Dr. Klaus Grellman is Managing Director, innogy Consulting. He served as Senior Manager for Strategic Planning at RWE AG. Previously, he was a Senior Manager at PricewaterhouseCoopers.
PUF's Steve Mitnick: Peter, many of us know that RWE is a major European utility that you ran as CEO for several years. Now you are CEO of the new RWE subsidiary, innogy SE. Did it really take you less than a year from the decision to found innogy to the IPO?
Peter Terium:To be honest, sometimes I need to pinch myself. Exactly three hundred and two days after the Supervisory Board's December 2015 decision to restructure the RWE Group, I rang the traditional bell on the floor of the Frankfurt Stock Exchange at the first trading day for innogy shares.
That was a great moment for all of our employees, for my colleagues on the Executive Board, and for me personally. Our IPO was the second-largest in the world last year, and the largest in Germany since 2000.
Imagine: a year ago, today's innogy did not exist. Now innogy is Germany's leading energy company, with revenue of around forty-eight billion dollars, more than forty thousand employees, and activities in sixteen countries across Europe.
And we have our innovation teams in hot spots all around the world - in Berlin, London, Tel Aviv and of course in Silicon Valley.
PUF's Steve Mitnick: Only few on this side of the Atlantic are aware of the transformation that gave birth to innogy. Can you walk us through the process that resulted in a new, multi-billion-dollar global utility?
Peter Terium: Globally, the energy industry is currently experiencing a wide-ranging transformation. Take Germany as an example: within just a couple of years, volatile renewable energy became the new normal, power grids needed to be extended and wholesale prices for power fell by more than half.
This is quite a disruption for a well-established industry! And of course, the change continues. In particular, we have identified three megatrends which are resetting the metrics for the energy system: decarbonization, decentralization and digitalization.
In this dynamic environment, energy companies can only succeed if they reinvent themselves completely. With innogy´s three business segments - Grid & Infrastructure, Retail and Renewables, we address the requirements of a modern, decarbonized, decentralized and digital energy world.
Innogy is not just going to sit back during the transformation of the energy system. We want to be the playmakers - the leaders. For this reason, we have set out a future-oriented approach for our organization - a blueprint for the energy company of the future. A blueprint for every traditional utility to use to transform.
PUF's Steve Mitnick: Klaus, what was your role in the transformation as an internal advisor to RWE/innogy?
Klaus Grellmann: When you observe that an entire industry is being disrupted, "wait and see" is not an option. Instead, we stepped up our game to actively shape this transformation.
We helped implement change tools and lean structures to make sure the company was ready for the biggest transition of its history. And of course, we also sent our best people to implement the actual IPO process.
We ensured operational readiness of all the entities, managed the clearing process and helped turn this huge endeavor into a great success. So we did our share to help innogy achieve an instant market capitalization of twenty billion dollars.
PUF's Steve Mitnick: How will innogy expand beyond the EU, and into North America?
Peter Terium: We are not in waiting mode in the U.S. - we are relatively advanced. And I am not only talking about solar and wind power, innovation or consulting activities.
eMobility is a very important business for us. We see clear indicators for exponential growth in that business of future mobility - in Europe and in the U.S. as well. We want to become the leading eMobility solution provider in the U.S. and in Europe.
Klaus Grellmann: Eventually, our activities here are a consequence of our belief in our brand. Yes, we want to increase sustainability. And therefore, whether it is eMobility or our consulting business, we want to have an impact and give the development of the U.S. utility sector an even more sustainable spin.
PUF's Steve Mitnick: innogy has gained a deep understanding of renewables and load management on its home turf in Europe. Do you see the utility bringing that expertise to the U.S. markets?
Peter Terium: Germany is one of the first industrialized countries that decided to change its entire energy system, from fossil and nuclear energy to renewables. That is an enormous challenge, believe me. We have gained a great deal of experience during this transition period which we are in.
And we would like to share this knowledge and experience with partners in the U.S. Of course, we do not believe that it is possible to simply export the European way to the U.S. That would not necessarily fit with the peculiarities of the U.S. market. Instead, we share experiences and practical knowledge. We are always in it for a mutual exchange and learning.
Klaus Grellmann: This is part of innogy's strength. We can combine a comprehensive range of topics across the entire energy value chain to offer integrated consulting services and solutions to our clients.
We can elaborate on the mindsets, tools and solutions which enable us and our clients to master the challenges we encounter. At the same time, we learn from the best practices that are successful in Europe and the U.S.
PUF's Steve Mitnick: Klaus, given your experience of advising innogy, what is your biggest learning on a personal level?
Klaus Grellmann: You will be surprised, but in the end even in a commodity business like energy it is all about the customer! Alongside regulatory, market and technology changes, I have learned to closely watch customer behavior. I want to be able to get current customer preferences right and have a good forward view about future behavior.
And, of course our unique offering is in combining this experience together with our deep industry expertise. It's a combination few other utility strategy consultants offer. We have done it before, and we have done it successfully. A metric of twenty billion dollars in the utility sector is one that few people could argue with.
PUF's Steve Mitnick: From your point of view, what might be the most important challenges for innogy in the next couple of years?
Peter Terium: Of course I am very happy with last year. We founded our company and we introduced our new innogy brand very successfully. But it is time now to close that chapter.
Complacency and competitiveness do not go together. And competitiveness will count more than ever in the years to come. The goal is for innogy to build on its good starting position in the competition between energy providers and other new players in our market.
A key driving force for us as a company is asking ourselves: what do I need to start doing now to be prepared for future energy trends? We constantly challenge our business model and embrace both transformation and innovation to stay on top of the game in a competitive and profitable way. We promised a lot. Now we must deliver.
Category (Actual):
Department:
