From an energy perspective Iceland is unique with all its production coming from renewables, primarily hydropower, and almost all of its heating coming from geothermal resources.
But don’t be surprised if you didn’t know that as rather few people do. Iceland is a (relatively) remote island and its power system is closed – there are no energy exports and the only energy imports are fossil fuels for transportation.
But that may be about to change with the growing interest from companies in sourcing green energy, Haraldur Hallgrimsson, Business Development Manager of Landsvirkjun, the state-owned National Power Company of Iceland, told Engerati in an interview at E-world Energy & Water 2016.
“We have long talked about gaining a premium for the renewable aspect of our energy production but only in the last few years has it started to become feasible as more and more consumer-oriented companies have started promoting the renewable aspect of the energy they use.”
For those companies those green credentials become part of their branding with their customers. This, coupled with the possibility of consumers in for example the UK or Germany being able to buy products produced with renewable Icelandic energy in the future, is raising the potential of energy branding Iceland.
“We believe the next generation will be much more aware of the importance of sustainable energy production and environmental impact. Our customer base will change demanding cleaner sources of energy,” says Mr Hallgrimsson.
Drawing a parallel with another longstanding traditional Icelandic industry, the fisheries, he comments that the country used to compete almost solely on a price basis. However, the fact that the fish stocks are a limited natural resource forced thinking on how to create more value from every fish caught. “We saw product development and we saw marketing but there was also a lot of branding, and we want to see similar things happening in the energy industry both to change how people see the industry and to promote the country.”
Conveniently on hand to help in this task is Dr Fridrik Larsen, who holds the world’s first and only doctorate in energy branding and heads up Europe’s first energy industry brand consultancy, Reykjavik-based LarsEn Energy Branding.
“Iceland’s brand is immensely important and will be more important in the years to come,” Dr Larsen told Engerati, pointing out that branding and marketing are distinctly different activities. “More and more companies are looking to Iceland’s renewable energy and branding is necessary to create the segment to purchase it over other energy sources.”
Dr Larsen, who is organizing the first energy branding conference in Reykjavik in September, says that branding is about adding “dimensions” to a product or a company to differentiate it from others.
“For commodities [such as energy] one cannot change the nature of the product and so one needs to find other ways to resonate with the consumer,” he says. “One way is to develop products such as the telecoms companies do with the various mobile packages. To do that one needs to understand the needs of customers and what makes them tick.”
Clearly energy branding has the potential to be a gamechanger for utilities and this appears to be starting to be recognized. [Engerati-Enel Goes Open Power] But more generally Dr Larsen believes that utilities know relatively little about branding and need to change their mindset towards it.
“Think back 15 years and the telcos didn’t believe in branding but now we see them competing with utilities for the smart home and which will win the hearts of consumers? For now, it is the utilities that will lose because they don’t have clear positioning and branding strategies.
“We are also seeing the megabrands such as Google and Walmart coming into the market. These companies know their customers and they appear to be giving things away but in reality they are not, they are building a customer base. The utilities already have a customer base and it’s their responsibility to use that to engage their customers, not just when bill arrives, and to up their game to branding.”