Challenger energy providers Octopus and Co-op Energy are plotting a merger, in the latest sign of seismic change sweeping the industry. Octopus is believed to be in talks to acquire some or all of its mutual rival’s 370,000 customers to add to its own 800,000 client base, taking it over the 1m mark. Co-op Energy is owned by the Midcounties Co-operative; its brands include Flow Energy and GB Energy. It made a loss on £423m of sales last year due to rising wholesale costs. In the mutual’s annual report in May, chief executive Phil Ponsonby said that as the energy market was unlikely to improve, the board was “considering options to reduce the overall impact on the society by the business”. Advisers at PwC were appointed to explore options for Flow and GB Energy, including a sale. Any deal with Octopus would be the latest move to consolidate the rapidly changing household energy supply industry. Last week, The Sunday Times revealed that challenger Ovo was in talks to buy the electricity and gas supply arm of ailing power giant SSE, which would turn it into the UK’s second biggest supplier behind British Gas. The market share of the big six energy suppliers – British Gas, Eon, Npower, SSE, Scottish Power and EDF – has plummeted from 99% in 2011 to about 73% today, amid pressures such as the price cap, carbon taxes and rapidly evolving technology.
Times 18th Aug 2019 read more »
Thousands of homes could lose their energy supplier in the coming months as a result of a financial shock looming over the industry’s smaller companies. Suppliers are due to pass on millions of pounds’ worth of renewable energy subsidies, collected via energy bills, to the energy regulator, Ofgem, by the end of the month. This deadline has in the past proved fatal for financially unstable energy suppliers, and it is feared that a string of collapses may follow in the coming months. Suppliers have until 31 August to pay their share of the renewable energy subsidies, or can opt to pay the amount owed – plus interest – by 31 October. In the past week, Solarplicity has gone bust, leaving 7,500 homes without a supplier. URE Energy was stripped of its supplier licence for failing to pass on its renewable energy funds from last year’s deadline. In total, 14 suppliers have crashed out of the market since the start of last year, and some predict the same number will fail in the years ahead. The regulator has appointed EDF Energy to take on Solarplicity’s customers but industry sources fear that the “bailout” will raise costs for the rest of the industry.
Observer 18th Aug 2019 read more »