9th April 2019

Supporting a more stable industry

We recently attended the Energy Live Consultancy Conference (ELCC) where we were discussed recent developments in the industry; including the spate of suppliers that have exited the market

Cng Cape

We recently attended the Energy Live Consultancy Conference (ELCC) and met with a range of industry figures to talk all things energy, supply and the industry over the past 12-months.

As well as giving us a fantastic opportunity to speak to our TPI’s, we were also able to discuss the recent developments in the industry; including the spate of suppliers that have exited the market, and the reasons for this.

In 2018, eight energy suppliers bowed out of the market, and in 2019 so far, we have lost at least three. Not only this, but last year also saw the UK’s third biggest TPI, Utilitywise, collapse. It’s been a daunting and volatile time in the industry, with many factors posing challenges for suppliers and TPIs alike.

New regulations imposed by industry organisations have had an impact on suppliers’ businesses. For instance, the recent price cap has led to a low appetite for investment in the market, and has squeezed the margins of many smaller suppliers, making balancing their portfolios more difficult.

On the reverse, however, with no imposed pricing floor (or minimum price), there is absolutely nothing stopping suppliers from offering unsustainably low prices to attract more customers. This has been the downfall of many suppliers in recent years, and although these prices do look more attractive to energy users, if this squeezes margins to a dramatic point, this is simply not enough to keep them afloat.

Another cause of concern in the industry is the fact that there are no restrictions in the marketplace in terms of who can and who can’t become a supplier and supplier licences are very easy to obtain. As a business that champions competition, we absolutely do not want to prevent new suppliers from entering the market, but there needs to be certain standards and requirements that new businesses must meet.

We’ve also seen a number of suppliers exit the market due to the fact they simply don’t have enough knowledge on how the industry works and what it takes to be a stable and successful supplier. This is something that needs re-evaluating, whether it’s imposing benchmarks that new suppliers must aim for, or providing better support and guidance. By encouraging development and progression, we can create a better industry for all involved.

It is very clear that more needs to be done in terms of educating and supporting those who operate within the industry in order to prevent any more suppliers from ceasing trading. Competition is a positive thing; it ensures that standards remain high and energy users have access to the right supplier and supply for them. Therefore, as an industry, we need to make sure we do everything to help new suppliers to thrive and flourish.

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