While Innogy and Perth-based utility SSE may have smugly considered that they have reduced their competition by merger their retail energy supply businesses – and thereby reducing the Big Six to the Big Five – but a new rival will launched in the UK market next week from Scotland.
ESB – the electricity supply board of the Republic of Ireland – is formally opening a new office in Glasgow as part of the company’s ambitious drive to develop renewable energy projects across Scotland in the coming years and the direction of Paddy Hayes, ESB Executive Director, Generation and Wholesale Markets
In addition, ESB will also shortly launch ESB Energy, along with ‘very competitive’ electricity and gas offerings to residential customers in Great Britain.
ESB is Ireland’s foremost energy company and is the country’s largest supplier of renewable electricity. It has been the main gas and electricity supplier in Ireland for more than 90 years, with more than 1.25 million customers and more than 7,000 employees.
For large energy users in the UK, ESB’s Smart Energy Services collaborates to dramatically reduce energy costs, carbon emissions and consumption.
Building on its development of an interoperable cross-border system of public charging points on the island of Ireland, ESB is a winning bidder in a major Transport for London (TfL) tender process to provide rapid charging infrastructure and services for electric vehicles in London, including the city’s iconic black cabs.
An ESB spokesman said: “Our pledge is to be the most innovative, responsible and easy to deal with energy supplier in Great Britain.
“And we’re continually planning for the future by investing in renewables, with 37 power stations across Britain and Ireland that include 18 wind farms and nine hydro-electric stations.”
There may be more mergers if the competition watchdog approves SSE and Innogy SE’s plan for a new utility which would create a company with £10.7 billion in sales and reduce the country’s Big Six energy providers to five.
The new company would be the second largest player in Britain’s retail power market with a 23 percent market share, behind Centrica’s British and Scottish Gas brand which has 27 percent.
Analysts and banking sources say more deals could follow as the long-standing market leaders wrestle with new rivals, low wholesale energy prices, a surge in renewable energy production and the prospect of a government cap on prices.
Neil Wilson, senior market analyst at ETX Capital, said. “The Big Six are losing customers at a record pace to smaller suppliers. They also face a hit from price caps and consolidation has its appeal in this kind of environment.”
The £30 billion market is still dominated by some of Europe’s biggest utilities, but their combined share of customers has been declining for years, with the latest threat the government’s plan to end what it calls “rip off” standard tariffs that still cover two-thirds of the market.
But the chief executive of one of the dozens of small independent rival energy providers commented:
“We don’t see how turning the Big Six into the Big Five will help consumers. Fewer suppliers means less competition and less competition means higher prices.”
Meanwhile SSE and Npower are facing a backlash over their plans to merge supply businesses amid fears over the fate of almost 16,000 UK employees and potential disruption for seven million household customers – complaints over incorrect and inaccurate bills are one of the most common sources of customer grievances.
10 Nov 2017