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The Topic: TPIs UTILITY WEEK | 3RD - 9TH JULY 2015 | 13 FRAGMENTATION OR CONSOLIDATION? While TPIs offer value to their clients in shielding them from the complexity of the energy market, it must be observed that the TPI market itself has become distinctly complex as a result of growth and diversification. There are now thought to be over 1,000 TPIs operating in the non-domestic market offering a gamut of services targeted at specific user groups. While competitive pressure has already caused some consolidation to occur, especially at the heavily saturated end of the market, EDF Energy's recent work- shop for TPIs at it Talk Power Conference, raised speculation about the scope for further consolidation – or conversely, fragmentation – in the future. Opinion was narrowly divided between these two prospects at the event and Robert Buckley, a TPI expert at Cornwall Energy, said this uncertainty was a natural product of a market that drives toward consolidation at the larger end but which is also prone to "atomising". "You have to understand that TPIs are all about delivering customer service. It's a very people-based industry in one sense, so there's a tendency for account managers at larger firms to become frustrated and set up on their own and take key customers with them," he said. Overall, Buckley said consolidation was likely to continue in the corporate TPI space while the SME market would see increasing disintermediation/ I n today's energy industry there are now several hundred TPIs operating in the market who, at the most basic level, help business customers buy energy. But the role of some TPIs has changed dramatically over recent years and, in response to the chang- ing needs of customers, companies such as Utilyx now engage in customer relation- ships that go way beyond assisting energy procurement. With approximately 50 per cent of the bill relating to non-energy costs, it is no longer enough just to address the half of the bill relating to the commodity price. We forecast that 83 per cent of cost increases between now and 2025 will come from non-commod- ity price increases. This means that what customers need from TPIs is not just support in buying energy. They need help managing price and consumption together to manage total costs. The minimum a customer expects a TPI to be able to offer is the essentials: delivering the best buying strategy and complying with legislation. However, businesses also need support in improving what they already do, whether validating that they are paying the right amount in energy costs for their port- folio of sites, or providing the insight and reporting to pinpoint exactly what energy they are consuming and where. Taking it to the next level is essential for more sophisticated customers, whether building strategies to manage long-term energy costs, carbon agendas or security of supply. Our customers are increasingly focused on optimising their consumption, business processes and generation. The best of the best are optimising their bills by managing their processes and buildings to minimise their exposure to high prices. The complexity facing customers in man- aging their energy costs has grown signifi- cantly in the past few years. What customers want is end-to-end support. Energy manage- ment has moved on, the services offered to support customers have moved on. The role of the simple broker is no longer enough to support business in today's energy world. Jo Butlin, managing director, Utilyx Viewpoint: More than intermediaries: the role of the TPI in supporting business CORNWALL ENERGY SME TPI INDEX – Q115 TOP 10 RANKINGS Cornwall Index rank Company Contracts Index Cornwall Index Q115 1 Utilitywise 5 18 2 Make it Cheaper 5 17 3= LSI Independent Utility Brokers 3 15 3= Power Solutions UK 4 15 3= Inprova 2 15 4= Alfa Energy 3 14 4= Commercial Power 4 14 4= Inenco Direct 4 14 5= Advantage Utilities 2 13 5= Auditel 2 13 5= Online Direct 4 13 5= Utility Renewals 2 13 5= Business Advisory Services 1 13 Average Index values for all 138 TPIs 1.4 7.9 Average Index last time (Q414) 1.4 7.6 CORNWALL ENERGY I&C TPI INDEX – Q115 TOP 10 RANKINGS Cornwall Index rank Company Cornwall Index Index in Q115 Q414 1= Inenco Group 20 20 1= Schneider Electric 20 20 2= Utilitywise 19 19 2= The Energy Brokers 19 19 3= Utilyx 18 18 3= EnergyQuote JHA 18 18 4= Bergen Energi 17 17 4= NUS Consulting 17 17 4= EnergyTEAM(Inprova) 17 - 5= Inspired Energy 16 16 5= Power Efficiency 16 16 5= The Utilities Exchange 16 16 Average Index (126 TPIs) 9.4 Average Index last time (Q414) 9.3 Source: Cornwall Energy, Business TPI update Total Index scores for SME and I&C are calculated by broker by sector as the sum of each score for Services, Finance, Employee numbers and contracts/volume. Where brokers are profiled in more than one sector, the highest Index score is used. Maximum Index value = 20.