In Fjordkraft, there is no doubt about what really matters: the customers. Rolf Barmen's goal is to deliver electric power to 40 per cent of Norway's population.
The power supply company has experienced fantastic customer growth since its inception in 2001. Now the Group is warning its suppliers of tough climate requirements as of 2019. If Fjordkraft is to survive and make a profit, the company must offer something customers are willing to pay for.
"This is a fact we have to deal with every single day," says Rolf Barmen. "The money we're going to live on tomorrow comes from the customers we have today."
Since becoming CEO of Fjordkraft in 2013, he follows developments in the market extremely close. Under his leadership, the end-user company has grown into the second largest in Norway.
Barmen's recipe for attracting customers’ attention is to seek them out and be accessible. The human touch is still more important than technology.
"In addition to building a strong, high-profile brand, old-fashioned selling is important to us," he says. "If we do a good job, we see that the Internet helps us with sales, but we realise major results when we run campaigns and set up stands, when we meet people face to face – good old-fashioned door-to-door selling!"
Fjordkraft’s customer base consists of households, municipalities, private companies and public enterprises. It is so valuable that it is not left entirely in the hands of unfeeling robots. Today's customers expect more than a recorded voice telling them to choose between four keys, three times before they are given a chance to talk to someone.
"The customer expects to contact us through multiple channels," he says. "Many chat with us to get a quick answer or if they just want to get hold of someone to talk to. The challenge is to handle this fragmented picture in a cost-effective manner."
What do you say to customers who want to produce their own power from solar panels on their roof?
"We offer to buy surplus power from customers, but today the market is too small for us to set up a service to deliver solar panels. We’re waiting to see how the market takes shape, and are preparing ourselves to enter it with what we’re good at: marketing, retail, distribution, facilitation, financing, insurance and so on. We’re going to look for opportunities to take our place in the value chain."
But isn't it now that the market is taking off? New operators like Otovo have already delivered around 1,000 solar power installations.
"What they're doing with solar production and the concept of neighbour power is very good, but it's doubtful that the majority of potential customers are going to convert to it. Power is so cheap in Norway that there may only be a few idealists who will try it. I don't think it will have any significant impact on the market over the next three years. Fjordkraft doesn't have to be number one in this area. But when the time is right, we'll use our competitive advantage to really move in. This is our strategy."
> Fjordkraft sells power to customers across Norway. In 2017, Fjordkraft also became a supplier of mobile telephony to private customers across the country.
> Fjordkraft is owned 48.85% by BKK, 48% by Skagerak Energi and 3.15% by Statkraft. In turn, Statkraft owns 49.9% of BKK and 66.62% of Skagerak Energi. Trondheim Kraft AS is wholly owned by Fjordkraft AS.
> Learn more about Fjordkraft: "Power to the people"
Fjordkraft has a strong awareness of digitalisation and its importance for consumers. Fjordkraft is now testing an Enova-funded technology that extracts meter data from consumers and, using algorithms, calculates how much power customers use for heating cables, electric vehicle chargers and coffee makers.
"We are keenly awareness of the consumer market, of smart technologies and smart homes – and gradually of those who will produce their own power. Fjordkraft is currently in a good position, but we can't spend a lot of money before we see the return on our investment."
What about batteries in people's homes? Is this coming?
"This is very exciting, but we’re uncertain whether today's battery production is environmentally friendly enough. The environmental impact of extracting lithium, for example, is considerable, and the question is how long this technology is going to be allowed to call itself sustainable. The day we find out that electric vehicle batteries aren't sustainable, we have a huge problem."
The head of Fjordkraft believes that the big impact will come when we see a new type of battery technology, one that we’re not yet aware of.
"Then our whole business will be turned upside down, but it will probably be some time before that happens."
Fjordkraft's ambition is to create the most attractive power supplier in Norway. In 2016, Fjordkraft had a turnover of almost NOK 5 billion. The goal is to double in size by 2020. This will require more employees, and Fjordkraft is constantly hiring new people.
"My management team's task is to chart a clear path for our collective aspirations, says Barmen. "Our mission is to create the most attractive power supplier in Norway."
POSITION: CEO of Fjordkraft
EDUCATION: MBA from the Norwegian School of Economics and Business Administration
MANAGEMENT EXPERIENCE: Barmen has been operations manager of IKEA Bergen, regional director of Telenor Telehuset and CEO of Telering, Chess Communication and NextGenTel
FAMILY: Married to Charlotte Eriksen Barmen, has four children Kristoffer (24), Andreas (21), Helene (9) and Victoria (7)
Recently, Fjordkraft surprised the market with a clear requirement that the company's suppliers must commit to being carbon neutral by 2019. The initiative is gaining international attention, and the UNFCCC (United Nations Framework Convention on Climate Change) has published an article on the climate requirement that has spread on social media.
"We see this attention as an acknowledgment of what we ourselves consider to be a bold and innovative decision, and an inspiration in our further efforts," says Barmen. "Hopefully, the media coverage inspires other companies to set the same requirement for their suppliers."
Fjordkraft recommends that suppliers follow three steps towards carbon neutrality: Measure their carbon footprint, reduce their own emissions and compensate for their residual emissions.
"Fjordkraft wants to create a market where carbon neutrality is the new standard," Barmen says. "Looking ahead, we may also demand that our suppliers' suppliers be carbon neutral. It's ambitious, but it will create a domino effect that will exceed all other climate measures. In Fjordkraft, we want this to be an example that others can emulate. If suppliers don’t want to sign up for this, Fjordkraft will use its market influence to find alternative suppliers."
Rolf Barmen thinks it important that Statkraft is also on board.
"We are committed to finding solutions with an effect that reflects the challenge we face. Our goal is to create a market where carbon neutrality is not only the ideal, but the new standard. Companies have a responsibility beyond maximising profits, and a green shift can also provide a green bottom line. Carbon neutrality will be a competitive advantage for Fjordkraft and for all those who have the courage to go ahead and set the same requirements," says Fjordkraft's CEO.
Text: Knut Fjerdingstad
Photo: Hanne Solheim, Øystein Klakegg
This 'Powertalk' interview has also been published in Statkraft's magazine People & Power no. 2/2017.
29. Dec. 2017
Statkraft's internal magazine People & Power brings interesting stories about the energy sector and the company's business activities. Some of the feature articles in the magazine are presented here on the Stories web page.
Read more about the magazine