With more than 30 years’ experience in technical, operational, asset management, corporate, and senior roles, David Smales has set his sights on guiding Queensland’s energy future as the new CEO of Energy Queensland.
David Smales took on the position at the Queensland electricity utility in October 2016, following its creation in July 2016 with the merger of Ergon Energy and Energex. He brings with him to the role a wealth of experience, including holding senior roles in UK and Australian energy companies.
Mr Smales said he started working in the energy industry 34 years ago, when he was 16, as an apprentice. Since then he has completed technical certificates, an engineering degree, and an MBA, and worked through a number of technical and managerial roles which has led him to his current position as CEO.
“I started my career with a government-owned organisation. I would say my experiences are pretty wide and varied, but probably the biggest learning opportunity has been working with very capable individuals with different backgrounds, and having diverse views and opinions. I’ve always tried to learn from others. I’ve been very fortunate in having been exposed to lots of different challenges over time, including operating businesses, building new facilities, or acquiring businesses, integrating and transforming them. However, the biggest part for me has really been the people I’ve come across during these experiences.”
Mr Smales said taking on the role of CEO was the next step in his career, and the opportunity came at an interesting time for the energy sector in Queensland.
“I think networks are the place of the future, as opposed to any other part of the value chain, and, from a global perspective, the Queensland energy environment in particular is an extremely exciting place to be. We have highly populated metropolitan areas, all the way through to the other end of the spectrum with isolated communities. We have to serve all of our communities and customers across that broad spectrum. Queensland is also interesting in terms of the level of change driven by solar uptake, which is at the cutting edge globally.
“From a business perspective, merging two large companies and transforming them, and looking to deliver a new future for them–that’s pretty stimulating for me. As is the scale and complexity. In that context and environment, the opportunity to be able to set and guide strategy for the business, and support people on the journey, for me, is just extremely rewarding. I couldn’t ask for a better opportunity.”
As the new CEO, Mr Smales has been playing a leading role in the merger of Ergon Energy and Energex into Energy Queensland. He said his role has been to harness the capabilities of the people in the organisation, and make sure the right conversations happen.
“Fundamentally, for me, it’s around enabling and supporting the organisation to make good decisions, guiding the overall strategy, moving the business forward at the right speed, and supporting people to thrive and perform in this environment.”
He said this process has been going well so far, with the implementation of new corporate structural changes.
“We’ve recently formed a new executive leadership team, and we’re starting to provide some strong and consistent leadership across the whole business. There are change impacts that are flowing through the organisation as the two businesses come together, and that will probably continue for the next six to 12 months, as we bed down the new organisation.
“We really want to move through that aspect of the merger process, and quickly become one team with a shared purpose centred on serving our communities and customers. It is still early days, in the scheme of things. However, the initial signs are all positive as we are delivering against both our financial commitments, and the key milestones that we have in terms of bringing the Ergon Energy and Energex businesses together.”
Despite still being early in the merger, Mr Smales said the organisation has already made significant progress in reducing its cost base, increasing operational capability, and creating critical mass.
“We’re driving down our cost base as we are delivering synergy benefits and improving the efficiency of our business, which ultimately will flow through to benefit our customers. We’re also increasing the operational capability and resilience of the business. By that, I mean we have a large operational footprint across all of Queensland, and working together as one team allows us more flexibility to support local communities. That truly comes to the fore during storm or cyclone events, where our response capability is really tested to the full extent.
“As we are bringing the businesses together, we are creating a critical mass in new capabilities. Within both businesses there are some wonderful things happening in terms of technology developments, and being able to combine and build upon this emerging intellectual property, and share it across the organisation, will ultimately deliver better outcomes for all Queenslanders.
“I think that over time, having a clear vision on how we interact with communities across all of Queensland will allow us to identify opportunities to better serve them. Then by delivering great community solutions and customer outcomes, we will be able to replicate those in other communities across the state.”
Facing the challenges
While Energy Queensland has been making strong progress, there are still a number of external challenges that it will have to continue to meet in the future. Mr Smales said that the energy market is always subject to ongoing change, and it is very rare that a day goes by without energy being a key topic in the media, for a wide range of reasons.
“One of the main challenges for us in a rapidly changing external context, is that we need to make sure that we’re not too internally focused and consumed with our changes, internal issues, and getting ourselves organised. We’ve got to connect externally, and this goes to the heart of creating value-adding opportunities, we’ve got to connect more strongly with our customers, and with our communities.
“We have a large team spread across the state, our employees actually live and work in our communities, and they want to continue to make a great contribution, and they want to feel proud of their role and their company. So it is clear to me that we’ve got to make sure that we are appropriately focusing on the external environment, rather than our own internal needs.
“I think the opportunity is for us to do that with some speed, and we’ll be able to do so if we remain clearly focused on delivering great outcomes for our communities and customers.”
Queensland’s energy future
Mr Smales said there are a number of activities already underway to help meet these challenges, as well as the energy needs of Queenslanders.
“We’re doing quite a lot in terms of trialling new technologies with various partners. Things like photovoltaics, batteries, and the like. There are companies we work with that support demand management, so we can look at people’s consumption patterns, and help them understand how best to optimise their bills and ongoing energy consumption.
“We’re looking at improving energy provision for local communities that may rely heavily on diesel fuel generation, by replacing it in full or in part with solar generation. There are lots and lots of things that we’re already doing out there. They might seem fairly simple on the face of it, but there are a lot of complexities around some of these issues, and that’s why it’s important to do the right trials, and have the right partners involved, so we can work through those, and get optimal outcomes for our customers.”
Mr Smales said there are other projects in the works, including working with the government and private sector to develop electric vehicle charging points to support the government’s plan to get an electric vehicle super-highway in Queensland, as well as exploring technology platforms to enable smart cities.
He sees Energy Queensland continuing to play an important role in projects such as these moving into the future.
“I think distributed energy will have a larger impact going forward, so there will be more and more distributed energy solutions emerging over time across Queensland. I do think we’ve got a significant role to play in that. There are areas where you can actually help the resilience of a network by increasing the level of distributed energy. In doing so, it helps with regional generation, regional employment, and building up sustainable communities.
“We have to remain relevant, so it’s important that we transform our business, to make sure we deliver the right outcomes for customers. If we rest on our laurels, we’ll not be in a great place in a number of years’ time. My view is that if we do things right, the networks will continue to play a critical role in the safe delivery of secure, affordable, and sustainable energy solutions to our communities and customers for decades to come.
“I think we have all of the right ingredients to make a very strong and sustainable business going forward, on the provision that we really work hard to serve our communities and customers.”