Utility Week

UTILITY WEEK | 19TH - 25TH OCTOBER 2018 | 3 This week 4 | Seven days 6 | Interview Peter Emery, chief executive, Electricity North West 10 Policy & Regulation 10 | News CCC asked to advise on net zero target 11 | Chief executive's view Rachel Fletcher, Ofwat 12 | Analysis CMA approval for the merger between SSE Retail and Npower 15 Finance & Investment 15 | News Financial support cut for electric vehicles 16 Operations & Assets 16 | High viz Severn Trent Water's flagship project, the Birmingham Resilience Project 17 | Market view The true cost of energy losses 18 | Event All the highlights from Utility Week's Congress 2018 23 Customers 23 | News Small supplier Usio latest to cease trading 24 | Insight report Optimising the customer journey in energy retail 30 Community 31 | Disconnector GAS 18 | Event All the highlights from Utility Week's Congress 2018 WATER 11 | Chief executive's view Rachel Fletcher, Ofwat 15 | News Funding 'at risk' from nationalisation 16 | High viz Severn Trent Water's flagship project, the Birmingham Resilience Project 23 | News Business complaints drop for first time ELECTRICITY 6 | Interview Peter Emery, chief executive, Electricity North West 15 | News Financial support cut for electric vehicles 17 | Market view The true cost of energy losses ENERGY 10 | News CCC asked to advise on net zero target 12 | Analysis CMA approval for the merger between SSE Retail and Npower 23 | News Small supplier Usio latest to cease trading 24 | Insight report Optimising the customer journey in energy retail Big changes in the market L ast week's approval by the Competition and Markets Authority (CMA) for the merger of SSE's retail arm and Npower marks a landmark change in the shape of Britain's energy market. While far from shock news aer provisional clearance was given in August, the decision augurs not only a seismic shi in the current landscape until now dominated by the "big six", but also further upheaval ahead. We have become accustomed to the volatility of this part of the sector, with its snowballing entrant numbers and tariffs. However, the creation of a new giant retail alliance is a key development. It represents a turning point in the fundamental market dynamic, spurred on by energy competition policy and regulation – not least the price cap. Certainly, the cap will have helped make the CMA's decision easier, with the two former rivals not major competitors for standard variable tariff (SVT) customers. Most significantly, it shows consolidation now happening at the very highest level of the market. Until now, change has been largely confined to smaller, challenger brands being acquired or rescued by medium-sized suppliers of last resort building customer bases. However, Ofgem's State of the Energy Market report last week proved a stark barometer, showing the market share of the big six dropping to a "new low" and annual profits of the six largest suppli- ers last year falling for the first time since 2014, to £900 million. It will be fascinating to see how retail's big new baby fares in the months ahead. As with any merger, there remain a ra of unknowns until the transaction finally goes through – from how the new company will differentiate its offering under chief executive Katie Bickerstaffe (a self-confessed lover of data with strong experience in the fast moving consumer goods space), to what it will mean for customer service during and aer the transition, for jobs, its call centres, IT systems, company culture and its much-anticipated new name. While the merger's "clean team" proceeds with all this and more, other energy retail watchers will be looking for wider signs of market movement and price cap influence in a constantly emerging picture. As one Utility Week senior industry source put it, if (as expected) the cap effectively discourages consumer switching, then the natural impact can only be to drive even more consolidation. Suzanne Heneghan, acting editor, suzanneheneghan@fav-house.com Leader Suzanne Heneghan Talend: Sponsored Free Water Case Study: optimising water supplies https://bit.ly/2CEQQpf IFS: Sponsored report: Getting Ahead in the Diversifying Energy Market https://bit.ly/2MXkFkI Unify: Sponsored Free Water Case Study: Transform CX and deliver exceptional omnichannel experiences https://bit.ly/2CEQQpf

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