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UTILITY WEEK | 16TH - 22ND OCTOBER 2015 | 25 Customers E arlier this month, independent sup- plier First Utility surprised the market by announcing plans to partner with energy giant Shell to launch into the German electricity and gas domestic supply market, its first move into a foreign market. First Utility's chief executive, Ian McCaig, tells Utility Week that he believes the com- pany can navigate the "confusing" German retail market (which is already saturated with small suppliers) by using its successful UK business model and its new partnership with global energy giant Shell. His recipe for success will be to offer German customers what they do not currently receive: simple, cheap transparent prices from a brand they know and recognise. Here, McCaig explains the reasoning behind the company's bold move. Why choose Germany for the first move abroad? "Most people are paying more in Germany than they need to. Switching numbers are proportionately less than in the UK, it's a bigger market, and it's the second most expensive market in Europe. "Having really established our- selves in the UK, there's an opportu- nity to take a very similar proposition with lower prices and transparency. No gimmicks, no funny mechanisms for getting money back, just clear, trans- parent low prices – and backed up by a brand that is very trusted in the market and with a way of working that has worked very well in the UK." How will you distin- guish yourself from other independents? "We are in partner- ship with Shell, which is a very established brand in the market already with very high brand recognition and consumer awareness. "In Germany, a lot of things are present that used to cause confusion in the UK: loyalty schemes, cashbacks, incentives. It's very difficult to cut through to what prices consumers are actually paying. We want to be a lot more transparent and get a lot more people interested in just being drawn to a more straightforward lower price proposition. What can the UK learn from Germany? "There's talk about abandoning the four- tariff rule in the UK. In Germany, where so many providers can construct so many products in so many ways, it's actually quite confusing for the customer and switching rates are adversely affected by that, and that's one of the concerns that we have for the UK. "I think we are on a journey where there will be a lot more independents and there will be different sorts, be they community providers, smaller independents, niches, or green and I think Germany shows where the UK might be headed." Is Germany doing any- thing to lessen the confusion? "They are trying to pay a lot more atten- tion to comparison sites and make sure there's real trans- parency with those comparison sites." Q&A: Germany beckons for First Utility boss Ian McCaig NUMBER OF GERMAN SUPPLIERS Electricity: 1,012 Gas: 527 GERMAN INDEPENDENTS' SHARE OF ELECTRICITY DOMESTIC MARKET Big four: 42% Independents: 58% GERMAN VITAL STATISTICS German electricity market: 1,012 suppliers – (electricity-only) – but approximately 80 per cent supply fewer than 30,000 metering points (there is a total of around 46 million electricity meter points in the country) German gas market 527 gas suppliers but approximately 68 per cent serve a maximum of 10,000 metering points (there is a total of around 14 million gas meter points) Source: regulator Bnetza Source: regulator Bnetza