Pinergy founder Enda Gunnell, FCA, set up his renewable energy start-up in 2012, playing a crucial role in laying solid foundations for Ireland’s sustainable future
Groundbreaking energy transition company Pinergy has grown to generate revenues of more than €250 million in little more than a decade by doing things differently, and founder Enda Gunnell sees more room for growth.
“That’s one of the reasons I want to stay in this industry,” he says. “The Irish energy sector is going through a once-in-a-century change and, with this level of change, there is always opportunity.”
Embracing change is nothing new for Gunnell, who left behind a highly successful career in practice to set up Pinergy in 2012.
He had initially come to accountancy “through the usual route”, he says. “I qualified with a B.Comm from University College Dublin (UCD) in 1989 and did the recruitment milk round, before being taken on by Mazars.
“That was the last year the B.Comm exams were held in the autumn, and I had had enough of university by that time.”
Gunnell didn’t yet know what lay in store, however. “I started my training contract with Mazars and within a fortnight I was back at UCD working on their audit,” he says.
“I spent 23 years with Mazars and was involved with UCD in one way or another for quite a bit of that time. The university then became my landlord when I founded Pinergy.”
Gunnell had played a role in helping UCD acquire a building adjacent to the Beech Hill Office Park and helped to develop a strategy to host partnership ventures with industry. “They had some spare space and that was our first office,” he says.
Having started his career with Mazars, Gunnell later moved into consulting.
“I thoroughly enjoyed my time with Mazars. I got great exposure to a wide range of clients across different sectors, including large corporates, institutional clients and a lot of owner managed SMEs.
“I was partnering with owner managers who had 50 or 60 people working for them but had no one to talk to. I was that person.”
Having been a Partner with Mazars for close to 10 years, Gunnell decided the time was right to try something new.
“I was probably looking for opportunities for a few years by that stage,” he says.
“I had got a bit disillusioned with professional services and the timesheets, chargeable hours and so on. Some of the projects I found interesting were not the type of things to earn high fee income in the short term.”
At the same time, Gunnell was working with owner managers, helping them to build their businesses. They were, he says, “good people”.
“I found myself thinking I would love a chance to do that myself. I hadn’t really thought about what type of business I wanted to go into, I just wanted to get out there and do it.”
Entrepreneurial start: the early days
The year was 2012, Gunnell was 43 years of age and a Partner with Mazars.
“I figured someone would give me a job if it didn’t work out. I was open to that risk,” he says.
Ireland was in deep recession at the time in the aftermath of the financial crash and Gunnell spotted an opportunity in the fledgling pay-as-you-go electricity market.
“The energy regulator was putting pressure on the electricity suppliers not to cut people off, if at all possible,” he explains.
“One of the solutions chosen was to install pay-as-you-go meters in debtors’ homes and collect the arrears through the homeowners’ electricity credit purchases.”
Gunnell’s approach was somewhat different. “We used the same technology, but differently. We went into the ‘lifestyle choice’ end of the market,” he explains.
“Our market was people who wanted help budgeting. We used the technology to bring the same customer experience people had become used to with pay-as-you-go mobile phone accounts.
“Ireland didn’t have a pay-as-you-go electricity market up until then.
“In the UK, 15 percent of the market was designated as pay-as-you-go and, in Northern Ireland, it was much higher than that.”
Although Ireland’s electricity market had been deregulated since the late 1990s, getting a licence to supply power was not easy.
“They said they welcomed competition, but I wasn’t sure if they were really interested in small start-up players like Pinergy,” Gunnell says.
“We partnered with an existing licencee initially and got our own licence from within the industry after that. We are now one of about seven national players in the market.”
The licence was just the start. Power supply is a highly capital-intensive business.
“I was very fortunate to have the support of a high net worth individual in the early years of the business. I didn’t have the financial wherewithal to do it myself,” Gunnell says.
“At that time and for a long number of years, half my time was spent growing the business and the other half was spent raising the money to fund the growth.”
Raising money in Ireland post-crash was no easy task.
“The banks became too conservative. No doubt they gave out money too easily to property developers, but they went to the other extreme after that.
“We did everything to raise finance, from placing ads in newspapers to issuing our own loan notes. It was real shoe leather capital.”
Pinergy has evolved considerably in the years since. “The industry is very old-fashioned. Customer loyalty is not rewarded,” Gunnell says.
“The incumbents sign people up for 12 to 24 months at a discount and then jack up the prices. That encouraged people to switch to get a discount somewhere else. We decided to do things differently and run the business from the customer perspective.
“We embraced technology. We were the first electricity company to embrace smart meters.
“Customers didn’t have to go to a shop; they could buy credit online or on their phone and it would go straight onto the meter, while being able to see their consumption on an app.”
Paris Climate Accord
The Paris Climate Accord in 2015 gave added impetus to the firm’s growth. “A smart meter is an energy efficiency device. The average home wastes 20 percent of its energy. Smarter users use less,” Gunnell says.
“We were a challenger brand and wanted to sell less electricity to customers. The incumbents were in the business of selling kilowatts, but how can they help save energy when their business models are built on selling as much of it as possible?”
Pinergy then broadened its offering by going into business with other energy technology providers in areas like micro wind, solar, LED lighting and data services.
Two of those partnerships in the solar PV and data areas are now Pinergy subsidiaries.
Energy efficiency and ESG reporting
The next pivot came with the company’s move into the commercial market.
“There is only so much you can do in a domestic household. We used our capability in smart metering to bring a new offer to the commercial market,” Gunnell says.
“We were able to supply data on consumption along with green, renewable power.
“We help our customers understand their power consumption and why they are using more than you should at different times.
“Our business is about energy efficiency. We are supporting customers through the energy transition and providing them with the data they require for emissions and environmental, social and governance (ESG) reporting.”
Commercial business now accounts for 90 percent of the Pinergy portfolio.
“We pulled back a little bit from the domestic market. The State was rolling out smart meters anyway. There was no point in us duplicating that effort,” Gunnell says.
Next phase of growth: energy generation
Pinergy is about to embark on the next phase of its growth journey following the acquisition of a majority stake in the business by Sojitz group, the Tokyo-based multinational.
Sojitz has acquired the holding of long-term shareholders, the Coates family.
“We wouldn’t have been able to achieve our growth ambitions without our previous majority shareholder,” Gunnell says.
“The Coates family have been phenomenally supportive of the company and the management team over the years.
“Without their support, we might not have been able to keep going during the energy crisis and we are eternally grateful for that.
“But, to keep going and moving forward in a capital-intensive industry like ours, we need access to funds that can’t be provided by a family office.
“The Sojitz group is a huge company with 25,000 employees and is listed on the Tokyo stock exchange.”
Gunnell’s ambition now is to see Pinergy evolve into a vertically integrated company with capacity to generate its own renewable energy.
“To get involved in that in any meaningful way you need hundreds of millions of euros,” he says.
“Sojitz has been in Ireland for 10 years and already has a generating capacity of of almost 250 megawatts.
“They are on the same wavelength as us and share our philosophy about partnering with customers in ways that make everyone more sustainable.
“We will now be able to start building our own generating assets.
“We will also broaden out to a dual fuel offering as well as broaden the energy services capability within the business.
“When we have our generating asset base in place, we want to move back into the domestic market.”
The future of sustainable energy
As Gunnell sees it, the future of energy is all about sustainability. “Energy providers have a key role to play in our sustainable future,” he says.
“In the past, it was about supplying power generated by burning dirty fuel. In the future, it will be about minimising consumption of clean, green, renewable power.
“We have been embracing the sustainability agenda at Pinergy for the past 10 years. We will continue to support our customers through the energy transition and help them meet their sustainability and ESG reporting obligations.”
Interview by Barry McCall
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