Utility Week

UTILITY WEEK | 26TH JANUARY - 1ST FEBRUARY 2018 | 23 Customers Analysis T here is a shoal of new fish in the energy retail market pond, but as any Blue Planet fan worth their salt knows, not all can survive. GB Energy Supply went belly up in 2016, while Brighter World Energy went the same way just this month. Yet even though the big six continue to dominate, they are steadily losing market share to small independents, which are identifying and tar- geting niche markets, many to great effect. A record 5.5 million households switched energy supplier last year. That is a 15 per cent increase on 2016 and the highest number that Energy UK has ever recorded. Compe- tition in the energy market has intensified accordingly – most switches went to one of the big six (British Gas, Eon, EDF, Npower, ScottishPower or SSE), but 28 per cent moved to small or mid-tier energy suppliers. Hence all the new kids on the block. The problem with this, though, is that the market is overcrowded – more than 60 suppliers are now operating, and the smaller companies are more vulnerable to the scourge of half- hourly imbalance charges imposed by the central wholesale trading market, as they can't cover their backs on the same scale as the big boys by hedging ahead. The demise of Brighter World, a socially minded innovative business, has led some to suggest the wheels of a long anticipated market shake-up may now have been set in motion. But for now, that's just speculation, and new business models continue to join the fray. Here we take a look at five, and what they bring to the energy party. Ram Energy Last October Derby Council became the lat- est local authority to launch its own energy company (in partnership with Nottingham Council's Robin Hood Energy). Ram is available to those with a Midlands postcode. There was a special introductory offer for all new customers in the first three months, with discounts for credit accounts managed online. Ram is also available to pay-as-you-go customers, who the council says have been "traditionally poorly served by the energy market". Pay-as-you-go customers will have new smart meters installed, enabling them to top up online and by phone, as well as via the traditional key card route. And Ram's launch was backed by some of Derby's larg- est employers, including Rolls-Royce, Bom- bardier and Toyota, who have said they will promote it to their staff. "Ram Energy is a local brand for the peo- ple of Derby, offering security and reassur- ance about value for money," said council leader Ranjit Banwait at the launch. "It is not about making big profits or paying share- holders, as is the case with the big energy suppliers. This will make a meaningful con- tribution to the quality of life in our city." Angelic Energy Based in London's Angel district in Islington, Angelic Energy is London's first municipally owned energy company for over a century – its parent company is Nottingham Council's Robin Hood Energy. Islington Council says that the business, which launched last Octo- ber, will focus on offering fair gas and elec- tricity prices, and its objective will be to li some of the capital's most vulnerable house- holds out of poverty. Claudia Webbe, the council's executive member for environment and transport, says: "For years, inflated energy prices have forced thousands of people across London into fuel poverty, with catastrophic consequences for their health and quality of life. Too many are forced to face the question 'heat or eat?' Chil- dren brought up in fuel poverty do worse at school and college, so helping current and future generations to stay warm and well is an absolute priority for us." Liverpool Leccy A joint venture between Liverpool Coun- cil and Robin Hood Energy, the Liverpool Energy Community Company (Leccy) was launched in April 2017 to tackle fuel poverty in the city. Leccy offers competitively priced gas and electricity, along with advice to help house- holds move off costly prepayment meters and onto cheaper direct debit tariffs. It says it also supports people in moving over to smart meters so they can manage their energy use and get help with managing their bills. As well as offering a one-year fixed rate deal that is cheaper than the tariffs currently offered by the big six energy companies, the council says more fixed rate deals are in the pipeline for Liverpool residents, and will be announced in the coming months. People's Energy Aer crowdfunding nearly £500,000 online, East Lothian-based People's Energy opened its doors for business in May last year, with a manifesto that included offering custom- ers greater fairness and transparency. The company sources its energy from the same wholesale market as established suppliers, but its founders (David Pike and Karin Sode) pledge that customers will automatically get shares in the company and a portion of its earnings – the couple have promised to redistribute 75 per cent of the company's profits as an annual rebate. Customers will also be given represen- tation on the board of directors, and key data such as salaries and wholesale energy costs will be published. The standard vari- able tariff (SVT) is forecast to be around £129 cheaper than the big six average, according to the company. It already has around 4,000 customers and 13 employees. OneSelect Launched in April 2016, Reading-based OneSelect says it's all about simple, cheaper energy. It had a blueprint to work from, as it launched EnergieFlex in the Dutch market in 2014. EnergieFlex was the first Dutch sup- plier to offer prepaid billing, smart meters and the ability to switch in just 24 hours – it now supplies more than 100,000 house- holds. OneSelect is aiming to apply the same principles to the UK market. The company says it offers "the same mix of great pricing, excellent customer service and innovative products" as Energie Flex, but in the UK. It's about low-priced energy, which is fixed for 12 months, and simple tar- iffs with no exit fees. Sink or swim? Utility Week rounds up some of the latest additions to the energy retail market, and looks at how the new independent minnows plan to stay alive in a sea full of competitors.

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