UK’s cheapest energy supplier closes doors to new customers

The independent energy company behind the retail market’s cheapest deal has shut its doors to new consumers amid concern over its mounting complaints and wafer thin cash reserves.

Iresa Energy is one of almost fifty challenger brands to the big six legacy suppliers but it has set itself apart by offering a rock bottom dual fuel supply tariff at an average price of £834 a year.

However, the company has slammed the brakes on its rising popularity after the regulator warned the company to get a handle on an increasing number of complaints from its customers.

“We told Iresa they needed to resolve this problem and have asked them to explain to us how they will ensure that it is easy for their customers to contact them and provide them with a level of customer service they are entitled to,” he said.

Iresa was not available to comment on its customer service or its decision to close the supplier to new customers.

The company’s meagre cash balance has also raised concern that Iresa may be the next casualty of rising energy company costs after the collapse of GB Energy due to the steady rise of wholesale market prices and other costs.

Iresa held just over £12,300 in cash and debt of almost £90,000 at the end of 2015 according to its most recent publicly available financial results which were posted to Companies House in September.

Ofgem has raised hackles among established energy companies by stopping short of setting minimum collateral requirements for new suppliers.

Instead it oversees a scheme which bails out the customers of failed energy companies using a safety net paid for by other suppliers, many of whom may have lost customers to under-funded suppliers offering unsustainably cheap deals.


A Consensus Busting Election on Energy Policy?

Contradicting months of definitive denials about the prospect of a general election, Prime Minister Theresa May announced a snap election this morning, set to take place on 8 June. Purdah could commence on the 4th May five weeks ahead of election day.

It is widely expected that the election will be dominated by Brexit. That’s no great surprise. But the presence of so dominant a single issue, and in the context of an opposition in obvious difficulties, the real question is what latitude this gives to the Conservative Party to push the envelope on other policy areas? These factors leave plenty of less illuminated space in their manifesto, to pursue what would otherwise be considered difficult or controversial policies. The temptation is obvious if these positions are likely to poorly scrutinised or challenged by opposition parties with eyes on internecine warfare (Labour) or on Brexit (Liberal Democrats). One area of obvious attraction to certain parts of the Conservative Party will be to continue to erode levels of commitment to dealing with climate change, and to decarbonisation.

The Conservative journey down this road has already begun, and continues a pathway set out in the last election manifesto in 2015.The Cameron era manifesto centred on “affordable, reliable energy” being “critical to our economy, to our national security, and to family.” Specific pledges included banning any new onshore wind and promoting competition through implementing the recommendations of the Competition and Markets Authority investigation.

We have already seen the abandonment of Carbon Capture and Storage competition, the erosion of financial support for renewables and the sudden change to Levy Exemption Certificates. In the last few weeks we have heard rumours that the government are effectively set to abandon their pursuit of the EU 2020 targets, and very powerful conservative voices put their names to the recent House of Lords report on energy policy that urged the journey towards prioritisation of cost and security of supply to accelerate. Furthermore, statements from BEIS and the Prime Minister about Big Six price rises being “unacceptable” may signal a manifesto commitment of action on energy prices and reinforce the weighting given to affordability ahead of carbon reduction.  The political spotlight generally has recently fallen on domestic energy prices in recent weeks and months though, and give the recent Parliamentary debate on the issue that garnered cross party support for intervention, we would expect all party manifestos to include a pledge to rein perceptions of unfair price differentials with some form of price freeze or cap

The only novel policy ideas recently have centred on the increasing prominence of the Industrial Strategy and government support and focus on key areas of the economy.

Generally, it is clear that the trilema has already been very nearly toppled off its perch in this Parliament by a dualema in form if not in legislative substance, where security of supply and cost of policy take pre-eminence over decarbonisation.

Whether the voices proposing further movements in this direction within the current government win out or not in explicit policy commitments in the conservative election manifesto this time is not a given. The Conservative Party is a broad church and there are plenty of climate change activists in its ranks. However, there is a clear ideological thread that appears to link Brexiteer factions and climate change scepticism. In the current balance of party power that prevails that may tip the balance towards an agenda that really shakes up the cross party, low carbon energy policy consensus. This is a consensus that has existed at least since the turn of the millennium, and is emblematically embodied in the Climate Change Act 2008.

Arguably, with this election we are as close as we have ever been to a reversal in policy that could threaten the 2008 Act. It doesn’t mean that there will a manifesto commitment to its repeal but even considering the risk of it happening is is a profound state of affairs and signals just how far the energy policy landscape has changed, and how quickly.

Whether we see this radical shift remains to be seen. In any event  an immediate and real impact of the election is the uncertainty and delay this will bring to much needed policies. So, at the very least it will put back much needed changes and refinements to policy, even if the current shaky accommodation of the trilemma is maintained.

Unless we see a slew of rapid policy announcements, then Purdah will mean the effective shutting down of BEIS and Ofgem as only day to day operations are maintained. What were expected to be imminent key decisions and policies now become immediately uncertain, in substance and timing. These include:

The expected green paper on effective competition in the domestic energy retail market
The timing of the next Contracts for Difference (CfD) auction
A raft of comprehensive reforms to embedded benefits (CUSC modifications CMP264/265, a Targeted Charging Review, and potential a Significant Code Review
The Smart Energy call for evidence and the anticipated follow up consultations on a wide range of related areas
The promised new accounting controls for low-carbon scheduled for November, but can this timetable now be met?
Similarly, a decision on the Carbon Price Support for the period post 2021 was due “later this year” but again now this seems challenging, particularly given the complex inter-dependency with whether we continue to participate in the EU ETS scheme
2025 coal closure policy
The Emissions Reduction Plan that the BEIS press office even this morning maintained would be released “shortly”
The UK was already on the cusp of an energy infrastructure investment hiatus because of Brexit, the possibility of a further Scottish Independence referendum, as well as the poor management of policy changes in areas such as embedded benefit reform. The election announcement merely adds to this unhelpful cocktail , adding considerably to the many unanswered questions hanging over UK energy policy. It may even be a direct contributor to further uncertain political inflexion points. For example, if the SNP takes 55+ seats, again then the calls for a second Scottish independence referendum will only become more deafening.

So, at the very least the election on June 8 will herald challenges in making timely decisions on the critical policies we adopt in pursuit of the destination of a low carbon future. However, we believe, more fundamentally, it may also change that destination altogether.


BILL HIKE EDF Energy to hike gas and electricity bills by 7.2% from June – adding £78 a year

It’s the second price rise in less than six months and it will add an average of £78 a year to bills for 1.5million customers


Hurricane Energy shares soar after it makes “largest undeveloped” UK oil find in waters west of Shetland

North Sea oil exploration company Hurricane Energy has made what it describes as the “largest undeveloped” oil find so far in the UK’s waters.

Hurricane has proven its Halifax prospect and nearby Lancaster field are part of the same huge reservoir that could contain 1bn barrels of recoverable oil.

The company’s shares whipped up a storm after the announcement, climbing throughout the day to close up 8.76 per cent at 59p, up from a closing price of 54.25p per share on Friday. This time last year, Hurricane’s stock was worth around 11p per share.

Read more: Open offer and £70m share placing whips up a storm for Hurricane Energy

In February, Hurricane said its initial 300m barrel estimate from the Lancaster field was too conservative and that it was expecting a “material uplift” in anticipated reserves.

An analysis of the Halifax well found a column of oil-bearing rock of at least 1,156m, which was described as “very significant”. The company had expected a prospect of a 700m oil column.

Production of the area, which is located around 60 miles west of Shetland, is expected to start in the first half of 2019.

Read more: The UK has awarded 25 oil exploration licenses in untapped North Sea areas

Hurricane’s next step will be to procure funding to help it pay for an early production system, which is expected to require several hundred million dollars.

This could take the form of equity fundraising, debt fundraising or a partnership agreement with an oil major – or a combination of these.

“This is a highly significant moment for Hurricane,” said chief executive Dr Robert Trice. “I am delighted that the Halifax Well results support the company’s view that its substantial Lancaster discovery has been extended to include the Halifax licence. We believe that the Greater Lancaster Area is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf.”

Read more: Oil prices edge up on Saudi promise to cut US exports

Shetland, Highlands and Islands Member of Scottish Parliament Maree Todd said Hurricane’s find was “a significant discovery and a welcome reminder of the huge untapped potential that remains in Scottish waters”.

“Perhaps this welcome news for the industry might, at long last, spur the UK government into action in providing long overdue support for Scotland’s energy sector,” Todd added.

SUEZ Announces Completion Of 3 UK Energy From Waste Plants

Waste management company, SUEZ, has announced the completion of four new energy from waste (EfW) plants. Three of which are in the UK.

The fourth is in Poland and, combined, boosts the group’s recovery capacity by an additional 1.2m tonnes of residual waste.

The UK plants are located in Wilton (near Newscastle), Severnside (near Bristol) and Cornwall.

In 2017, SUEZ will recover more than 9m tonnes of waste in 55 EfW plants in Europe, compared with 8.5m of tonnes recovered into energy in 2016.

Seven TWh of energy will be sold, which is the equivalent of the annual consumption of a city with 2m inhabitants, such as Vienna or Hamburg, and will avoid more than 1.5 m tonnes of CO2 emissions, SUEZ says.

Jean-Marc Boursier, Group Senior Executive VP in charge of Recycling & Recovery Europe at SUEZ, said: “Waste can become secondary raw materials. Waste that cannot be recycled is also an energy resource with three benefits as it is local, low-carbon and affordable for both local public authorities and industries.

“We are convinced of the growth potential for the Group in Europe and on international markets. Our ambition is to recover more than 10m tonnes of waste as sustainable energy by 2020”.