UK Retail Market Attracts New Models
Privately-owned Octopus Energy has bought French Engie's 70,000 domestic UK energy customers for an undisclosed consideration, the two said January 20. Engie UK retains its portfolio of business energy customers and district energy supply operations.
Engie, which entered the UK residential energy supply market in 2017, said it would "continue to invest in and develop those areas which support its zero carbon strategy. These include electric vehicle infrastructure, smart building technology and offshore wind."
For Octopus, on the other hand, this is its sixth acquisition in just two years, taking its customer base from 500,000 at the end of 2018 to 1.4mn. It said the new customers would be enrolled over the coming months on the same terms they enjoyed at Engie. Octopus Energy was the first company to announce a 2020 price cut for customers owing to lower wholesale market prices.
CEO Greg Jackson said Octopus was investing to "drive the green energy revolution – our technology enables a lower cost transition and our rapid growth means we can bring the benefits of cheaper, greener, smarter energy to ever more customers."
Swiss Axpo also announced further expansion in the UK market, with a three-year deal to supply gas and power to retailer So Energy. Axpo said the deal "strengthens Axpo’s position in the UK energy market and is So Energy’s largest energy trading deal to date. Axpo will provide So Energy access to the long and short-term commodity markets, and will also improve So Energy’s capabilities in accessing renewable sources of energy for its customers."
So Energy co-founder Simon Oscroft said the company had quadrupled in size in the last 18 months, and has almost 200,000 green energy customers. "This deal means we can buy the best value energy in advance for our customers’ contracts, meaning we can continue to grow at existing rates and continue to provide market leading customer service and tariffs into 2020 and beyond.”
Many new energy suppliers have entered the UK market in the recent past, hoping to grow fast and to sell on in a short period; but failure to hedge and a lack of financial muscle meant that few could survive the turbulence of the last few years. The Beast from the East in the winter of 2018 and regulatory changes forced most of these companies into bankruptcy.