Utility Week

12 | 26TH OCTOBER - 1ST NOVEMBER 2018 | UTILITY WEEK Policy & Regulation Analysis I n a sector dominated by talk of smart systems and digital disruption, it is some- times easy to forget that the UK's energy industry was once run by town halls. The era of municipal energy appeared to come to natural end with the 1947 Electricity Act, which nationalised more than 500 sepa- rate generation and supply organisations into 14 area boards. However, in the finest traditions of a show business comeback, the concept of coun- cils selling electricity came back into vogue around six years ago. Spurred on by the chance to open up a valuable source of income, tackle fuel poverty and tap into the green agenda for renewables, there followed a flurry of announcements and press launches and it seemed every council in the land would soon have their own white label or fully fledged energy services company. As with many a comeback, however, problems emerge, and over the past 18 months the torrent has turned into a trickle, with local authorities appearing to lose their appetite for energy. In August, Portsmouth City Council very publicly abandoned plans to create its own energy company aer the new administra- tion decided that what lay ahead was not profit but loss. Speaking at the time, the leader of the council, Gerald Vernon-Jack- son, said they had taken the decision "to limit the council's losses and make sure no further money goes the same way". Given the enormous financial pressures many councils find themselves under, a reluctance to commit millions of pounds of taxpayers' money to a risky venture like an energy company is understandable, but has the second coming of municipal energy stalled before it ever got a chance to prop- erly get going? Or is this just a temporary blip? To paraphrase a well-known foot- ball anthem, could energy still be "coming home" aer all? The largest operator in the local authority energy market is Robin Hood Energy, which was launched by Nottingham City Council in 2015. The supplier has more than 120,000 cus- tomers, totalling over 200,000 meter points, and nine white label partnerships across the country, including The Leccy, Your Energy Sussex and White Rose Energy. In 2017, aer only three years of trading, the company returned a profit of around £200,000, which was reinvested into a Warm Home Discount scheme to help some of its most vulnerable customers during the winter months. "We believe Robin Hood Energy is the missing piece of the energy industry puz- zle, helping to redress the balance in the energy industry in favour of the consumer and championing the public's right to access fairly priced energy," said the supplier's chief executive, Gail Scholes. In addition, Ovo Energy has a num- ber of white label deals with various local Is energy a local business? Is energy supply a legitimate area of interest for local authorities, or an expensive vanity project that is unlikely to either make money or help the local community? Jamie Hailstone reports. company between Cheshire West and Ches- ter Council and Engie set up in 2015. Qwest Services provides expertise in facilities man- agement, customer services, workplace solu- tions and digital transformation for local authorities. "We are already working with more than 400 communities in the UK, providing tech- nical and facilities management services to local authorities and in regeneration and the refurbishment of homes," says Mr Dibble. "There is already the 100 per cent council-owned approach in the market," he adds. "There's the white label approach with backing from a private supplier, and then there are council-to-council deals. This is another form of that arrangement, which fits well for Engie, but that's not to say we would rule out the more straightforward white label with other councils and we are still interested in developing that activity where we can. "It comes down to the council and how much risk they want to take and what their appetite is to dive into the energy market, and commit public money. Obviously, there are examples where councils who have taken that plunge with a full energy services com- pany. For others, that is not necessarily the logical way to do it," adds Dibble. Qwest Energy will offer a range of tariffs, with customers being automatically rolled on to the company's cheapest comparable deal at the end of their fixed-term contract thanks to a rate rollover promise. "We see this as a community model and an opportunity to help support the council in its fuel poverty activities," says Dibble. "There will be a social tariff, targeted in specific postcodes in the region, which will support those who most need it and will help fund energy efficiency advice, home visits and drop-in sessions. "We've also been working with the coun- cil's affordable warmth steering group, which brings together the various charities and stakeholders to work with them and use those funds. "The important element is to provide a local vehicle to engage people in the energy We believe Robin Hood Energy is the missing piece of the energy industry puzzle, helping to redress the balance in the energy industry in favour of the consumer. GAIL SCHOLES, CHIEF EXECUTIVE, ROBIN HOOD ENERGY authorities, including Southend Energy and Peterborough. The latest entry into the market is Engie, which recently signed a contract with Chesh- ire West and Chester Council to launch a new platform called Qwest Energy. Speaking to Utility Week, Engie's divi- sional chief executive for homes and enter- prise, Kevin Dibble, says the new energy company is the result of a "long-standing partnership with Chester and Cheshire West Council". Qwest Energy has been developed through Qwest Services, a joint venture

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