Stick or twist: TPI views on switching

David Peake, a director of The Energy Brokers appeared in the recently published Directors’ Energy Report 2017 published by The Energyst. In his opinion, customers have “come around to the view that they will not make a significant saving [from switching] first time around”. For larger firms, “the real value” lies in consolidated billing while intermediate-sized business may be “under the illusion that they will receive greater bill savings than they will actually get”. Meanwhile, for “single site customers with a small level of consumption, it is going to be a negligible saving”. For those that do want to switch supplier, Peake advises a layered approach. “Rather than try to get a 2-5% saving from day one, we are advising clients to go shorter and also out of sync to the main round. Everyone is going to submit to an early [switching] round, assuming the market is ready,” he said. “But [instead switching all sites at once], we think it might be better to split portfolios, take some contracts out on a year, take some out on 18 months, some out on three years. That way, as the market develops greater liquidity, you start to see the benefit sooner. The lesson from Scotland is don’t take a 3% saving and lock out with that provider for three years. You would probably receive better value going shorter. So we are looking at whether we can devise a solution on that basis.”

The Energy Brokers is publishing a paper on Openness and Transparency in Energy Pricing and Purchasing.  Email info@tebl.com to receive your copy.

Source: The Energyst

Consultus acquires ‘The Energy Architects’

The Energy Brokers parent, The Consultus International Group, has acquired specialist energy company PEMXQ.

PEMXQ, which trades as The Energy Architects, delivers consultancy, energy and carbon management, building services, sustainability, procurement and utility connections.  It operates mainly in the UK and is based near Southend in Essex. The business was founded by Malcolm Cooper in 2006, and employs a specialist team of energy and engineering services experts.

“We’re delighted to become part of Consultus. We share a common philosophy and have also grown organically through our professional approach and reputation,” said Malcolm Cooper. “This allows us to move to the next level and expand on our services. In turn, The Energy Brokers will be able to assist us to provide services in key areas to PEMXQ clients.”

“This is part of our expansion and diversification plans, in line with a stated objective to move into areas including water, energy efficiency and greater international operations,” says Andrew Staley, Consultus CEO.

For more information, read the full press release or email info@tebl.com.

Energy company pricing announcements

On 10 February 2017 Npower announced it was increasing gas and electricity prices by 9.8% from March, not long after EDF had also announced price increases. Scottish Power then declared price rises – its dual fuel prices will go up by 7.8% from the end of March.

However British Gas, the market leader, has stated that it will extend its current price freeze for customers on its standard energy tariff until August. With three-quarters of its customers on standard variable tariffs, this decision will benefit around 5 million household customers. The move puts immense pressure on the three members of the Big Six who have announced price increases to decide whether or not to go ahead with them. British Gas, which has now frozen prices, has a total of 6.6 million customers, more than the three that have raised them – EDF, Npower and ScottishPower – combined.

It remains to be seen if the two other members of the Big Six, German-owned Eon and the number two player SSE, continue their current freeze on prices. Similar to British Gas they committed to a price freeze for the winter and may now decide they have no choice but to extend it to August.

Contrary to popular belief this proves there is competition in the energy market.

Source: Sky News

State of the market update from The Waterbuyers

The new deregulated water market is a fast-flowing situation so expect quite a few developments in the weeks running up to the market launching.

For now, industry regulator Ofwat and the Government Open Water programme remain upbeat. They maintain confidence in preparations for the 1st April 2017 “go live” date. While there is skepticism from many quarters over how accurate this view is, at this stage we should take the guidance offered by the regulators. The feeling on the ground – and the opinion of many of those already involved in making the market – is slightly more pessimistic. We only need to look to the June referendum and US election to note that “official guidance” and opinion polls are sometimes seriously flawed – and the sentiment of the masses provides a more accurate barometer.

We know already: the shadow market has been operating since the start of October 2016; not all Wholesalers have provided their pricing to the MOSL system (market operator); customer/business data is not up-to-date – leading to errors for the foreseeable future; we’re awaiting the Secretary of State’s communication that the market is fit for release; plus – individuals and companies may already be contacting business customers to recommend contracting now – so you need to proceed with caution.

Our opinion is that it’s not possible at this stage to provide solid recommendations to contract with any supplier or retail partner. The prices aren’t known and hence any discounts are simply guesses. The position will start to solidify as we continue through February.
So what are the options?

You could do nothing and remain on the retail tariff. This won’t be particularly punitive in the first instance, but is likely to be an increase on what you pay this year.
You can go to market early and take your chances that the pricing is as good as it is going to get.
You can sit back, assess the suppliers on offer… and push the button when the initial dust has settled.
To keep up-to-date with the latest developments and how they may affect you, sign up to our water news bulletin, “The Tide”.
Or for more details on how The Waterbuyers can help you save money when full deregulation of the water market comes into force. Find out what we can do.

Additional sources of information: OFWAT / Open Water / MOSL

Source: The Waterbuyers

Provisional Capacity Market cleared at £6.95/KW

The capacity market clearing price was confirmed on Friday by delivery body EMR at £6.95/KW, the lowest ever reached in a Capacity Market Auction, which guaranteed £378.3m in revenue to UK power generators.

A combined capacity of 59.28GW entered the auction, with 91.82% receiving Capacity Agreements for delivery next winter. The majority of the 54.4GW procured was picked up by existing gas power stations, who received £153m in guaranteed payments. Coal fired or coal and biomass generation plants secured 19% of the auction, a total of 10.5GW and £73m in revenue. This included the Eggborough coal-fired power station plant, which was set to close in March 2017. The plant will now remain open until March 2018; potentially remaining open until 2023 if more contracts are won.

EDF were the largest party winning contracts and were had 12.6GW of capacity, including 100% of its 7.9GW of nuclear capacity winning a contract. Capacity secured by the “Big Six” totalled 64% of contracts awarded in the auction. A breakdown of capacity by party is displayed below.

Supplier Capacity Awarded
EDF 12.6GW (15%)
Npower 7.9GW (15%)
E.ON/UNiper 5.2GW (10%)
SSE 4.5GW (8%)
ENGIE 3.1GW (6%)
Centrica 2.5GW (5%)
Scottish Power 2.2GW (4%)

 

Industry officials criticised the results for not encouraging green projects. With 96.4% awarded to existing generation and interconnectors, commentators expressed dissatisfaction as battery storage won just over 10MW of combined capacity, significantly lower than the 500MW in the previous auction.

Results will be provisional until 15 February, with the Secretary of State deciding whether the auction results will stand before allowing National Grid to publish the final auction results. If approved, providers will be expected to deliver their obligation during times of system stress from October 2017.

Source: The Energyst

Who’s who in the water market

Water is open for business …“From April 2017, nearly every business water customer in England will be able to choose who they pay for their retail services… You can choose to have one retailer for your fresh water supply and another for wastewater services or just have one for both… It could also help you save water, spend less and get more benefits.” Source: Open Water programme – UK government

If you need more background facts relating to deregulation of the UK water market, here’s some resource information which may help you:

Ofwat: The economic regulator of the water sector in England and Wales: a non-ministerial government department established in 1989 when the water and sewerage industry in England and Wales was privatised. “The Water Act 2014 enables the creation of a new market for retail water and sewerage services to eligible business customers (businesses, charities and public sector organisations) in England. This new market will work effectively with the existing market in Scotland.”

Open Water: The UK government set up the Open Water programme of work “to deliver the competitive market by April 2017”. Key organisations responsible for delivering the market are the Department for Food, the Environment and Rural Affairs (Defra), Ofwat and MOSL. Defra oversees the framework of the market in England, the Welsh Government oversees the framework in Wales, Ofwat monitors the market and licenses retailers and wholesalers, and market operator MOSL develops/delivers core systems and processes.

MOSL: Market Operator Services Limited (MOSL) is tasked with delivering the core IT systems and processes to support registration, customer switching, and set­tlement between water industry wholesalers and retailers. It also offers its water company members “support and advice on their business readiness activities” as the deregulated market approaches.

The Waterbuyers can help you towards saving on your water costs when water deregulation arrives. Stay up-to-date with the latest water industry news by signing up for our water bulletin, “The Tide”, covering the state of the market, what we know, what our experts think – and the options open to you.

Source: The Waterbuyers