Utility Week

UTILITY WEEK | 13TH - 19TH DECEMBER 2019 | 7 Review of the year Energy retail casualties It felt like "another month, another failed supplier" during a turbulent 2019 for the energy retail market. The year has seen several suppliers exit the market, impact- ing thousands of customers: Eight suppliers failed in 2019 and more are expected to in 2020. This year's causalities were: Economy Energy: 235,000 domestic customers (January) Our Power: 38,000 domestic customers (January) Brilliant Energy: 17,000 domestic customers (March) Cardi Energy Supply: 800 domestic customers August) Solarplicity: 7,500 domestic customers, approx 400 business customers (August) Eversmart Energy: 29,000 domestic customers, plus 10 business customers (September) Rutherford Energy: 280 business customers (October) Toto Energy: 134,000 domestic customers (October) "The energy retail market feels broken." Sara Vaughan, political and regulatory aŽ airs director, Eon UK continued overleaf ☛ The price cap The new year wasted no time in making its mark, with the now notorious price cap staging its long- anticipated entrance on the stroke of midnight. While utilities were resigned to a challeng- ing 2019, the big six energy players were particu- larly girding themselves for a tough time, not least because of the government's historic market inter- vention in capping default tari• s. Already cited as a key factor behind the surprise collapse of a market-changing merger between Npower and SSE's retail arm at the end of 2018, hindsight has shown the cap's impact to be an ongoing narrative throughout 2019. It was brought in by then-prime minister Theresa May to help ensure that customers loyal to their supplier "pay a fairer price for gas and electricity". Originally set at £1,157, Ofgem reckoned it would result in a £75 saving for the 11 million custom- ers on typical dual fuel standard variable bills. It has since risen to £1,254, before falling to its current £1,179 level. Yet it will also go down as industry's most divisive issue of 2019, playing a leading role in other market dramas: incumbents haemorrhaging customers; Centrica's legal challenge to the regu- lator over how the cap was calculated; and SSE's sale of its retail arm to'Ovo. Yet while Energy UK warned that up to 10,000 jobs could be lost as industry struggled to adapt to the cap, those who predicted in January it should not pose a problem for e— cient companies were still making that case at the close of the year. The takeover of SSE by a strong, newer entrant was heralded as positive, and increased switching a testament to how competition is changing old norms. Debate will continue about whether the cap will end in 2023 as planned, a decision the new govern- ment will preside over (see UW Mani- festo, p12) "Make price cap permanent." Greg Jackson, chief executive, Octopus Energy

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