UK energy provider Scottish Power to take on 129,000 new customers following Extra Energy collapse

Scottish Power, a Glasgow-based energy company founded in 1990, has been tapped this week to take on Extra Energy’s customer base after the company’s collapse last week.

The appointment of 108,000 domestic and 21,000 business customers to Scottish Power has been organised by Ofgem. The UK government’s regulator for electricity and downstream natural gas markets allocated Energy Extra’s client book to Scottish Power as part of an initiative to get customers “the best deal possible”, according to a report by Energy Live News.

Under the new agreement, Scottish Power will “honour all outstanding credit balances of the customers, including money owed to both existing and former domestic and business customers.”

New customers of Scottish power will be contacted by the ‘big six’ energy provider over the next week, after which “customers wishing to leave ScottishPower can do so.”

Philippa Pickford, Interim Director for Future Retail Markets at Ofgem said in a press release: “We are pleased to secure a deal with Scottish Power, where Extra Energy’s domestic and business customers will be offered a competitive tariff for their energy. Their credit balances will be honoured and their energy supply will continue as normal.”

She advised Extra Energy’s customer base to “wait until Scottish Power contacts you. They will give you more information about the tariff you are on and about your credit balance if you have one. Once the transfer has been completed, you can shop around for a better deal if you wish to.”

Sun setting behind the silhouette of electricity pylons

Extra Energy collapse is the sixth this year

Another small energy supplier – Extra Energy – has ceased trading, the company has announced.

It is the sixth energy supplier to go out of business since the start of the year.

The company had attracted just 108,000 domestic customers and 21,000 business customers.

However the regulator, Ofgem, assured customers affected that their energy supplies will continue as normal, and any credit balances will be protected.

In due course a new supplier will be appointed by Ofgem, and customers will be transferred directly.

“If you are an Extra Energy customer, under our safety net, we will make sure your energy supplies are secure,” said Philippa Pickford, Ofgem’s interim director for future retail markets.

“Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch.

“You can continue to rely on your energy supply as normal. We will update you when we have chosen a new supplier who will then get in touch about your new tariff.”

The other suppliers to cease trading this year were:

  • Future Energy ( January)
  • National Gas and Power (July)
  • Iresa (July)
  • Gen4U (September)
  • Usio Energy (October)

Since the gas and electricity supply markets were opened up to competition, the industry has attracted dozens of new entrants.

As of June this year there were 73 suppliers, including 67 smaller operators. Ofgem said 13 new suppliers entered the market in the year to June.

Of customers switching provider, many have chosen small energy firms over the “big six”, who have consistently lost consumers.


UK energy prices expected to soar after Brexit

Energy UK, the industry’s trade association has warned that uncertainty in the sector will lead to increased energy prices once the UK leaves the EU in March 2019

The trade association said that pressure surrounding plans for a carbon-pricing mechanism and cross-border trade is likely to increase bills for business and domestic customers.

Earlier this year, a House of Lords committee warned that the UK faces energy shortages and increased gas and electricity bills after Brexit, if the transition is not managed well.

At the moment, the UK heavily relies on energy imported from Europe.

Following the proposed price increases, Make It Cheaper, the business energy switching service, is urging UK business owners to switch to a better business energy deal and lock prices in for as long as possible, before energy prices are due to rise post-Brexit.

Jon Elliott, CEO at Make It Cheaper, said: “Brexit is of course a hot topic for any business in the UK, and means uncertainty around all business costs. Business energy is no different.

Energy UK’s report highlights some of the causes of these likely rises and only goes to strengthen the case for switching soon for longer fixed term tariffs, securing rates for your business before they become too volatile.”

You can find out more on the Make It Cheaper blog: How will Brexit affect your business energy bills?


Centrica’s British Gas launches first residential tariff for electric vehicle users offering cheaper electricity at night

Centrica PLC’s (LON:CNA) British Gas unit has launched a new smart time-of-use tariff for electric vehicle users offering cheaper electricity at night between 12.30am and 7.30am to charge their cars.

In a press release on its website, the FTSE 100-listed group said electric vehicle drivers use up to 80% more electricity if they charge at home and so can benefit from tariffs which pass on cheaper overnight wholesale electricity costs.

Peter Simon, Customer Propositions and Product Director at British Gas said: “This is our first residential EV product. Over the coming months, we will launch further electric vehicle charging services to both residential and business customers.”

The smart tariff is dual fuel, fixed until November 2020 and has no exit fees. The average annual bill of £1,547 is based on an average electric vehicle user consuming an additional 2,340kWh of electricity per year by charging their car. It is available for new and existing customers paying by direct debit.

Earlier this year, Centrica invested in Driivz, which offers end-to-end software solutions for electric vehicle charging, demonstrating its commitment to this market.

There are currently 200,000 electric vehicles on the road in the UK, and the number is forecast to grow to 1.4mln by 2025.


UK’s richest man eyes North Sea oil and gas fields

Britain’s richest man Jim Ratcliffe is hoping to extend his grip on the North Sea by buying oil and gas fields from US giant ConocoPhillips.

Mr Ratcliffe’s company Ineos and ConocoPhillips have both confirmed that they are in exclusive talks.

Among the assets up for grabs is Conoco’s 6.5% stake in the Clair field, west of Shetland.

The field potentially has 7 billion barrels of oil in place, according to BP’s chief executive Bob Dudley.

BP recently bought a 16.5% stake in the Clair field from ConocoPhillips, giving the UK oil giant a total holding of 45.1%.

Reports suggest that the assets ConocoPhillips is selling could be worth as much as $3bn (£2.3bn).

They do not include the company’s oil terminal in Teesside or its commercial trading group based in London.


The North Sea is still a relatively new area for Mr Ratcliffe and Ineos.

The billionaire, whose £21bn fortune makes him the UK’s richest man according to the Sunday Times rich list, has traditionally invested in speciality chemicals businesses.

Ineos owns the Grangemouth oil refinery site in Scotland which manufactures a range of petrochemicals that are used in a wide range of products including bottles, food packaging and in the pharmaceuticals industry.

neos first acquired a number of North Sea gas fields in 2015 before it buying up the oil and gas business owned by Denmark’s Dong Energy for £1bn two years later.

The Sunday Times reported that Ineos had put down a deposit in exchange for three months of exclusive talks with ConocoPhillips.

Ineos declined to comment.


Which?: Energy companies need to install 30 smart meters a minute to meet 2020 target

Consumer rights group raises fresh fears over pace of smart meter roll out, as government awaits latest damning NAO report

The scale of the challenge facing the UK’s smart meter roll out will be hammered home once again this week with the release of two major reports warning the high profile project is running badly behind schedule.

Today consumer rights group Which? published an update warning energy suppliers will need to triple the current rate of smart meter installation to hit a target of replacing all existing meters by 2020.

Which?: Energy companies need to install 30 smart meters a minute to meet 2020 target.


The organisation calculated that to meet the long-standing target suppliers will need to install an average of 30 smart meters per minute, every day, for the next two years, to fully replace 46 million existing meters.

The report comes just days ahead of the anticipated publication of a new report from the National Audit Office, which is expected to feature scathing criticism of the £11bn project, accusing it of being badly delayed and over budget. It is also set to highlight how the rollout has seen millions of first generation smart meters installed that will have to be upgraded in the coming years to provide the smart grid functionality and interoperability that is expected to be one of the main advantages of the technology.

The Which? report also argued that government estimates for the expected savings on an annual dual fuel bill in 2020 as a result of the rollout have already fallen from £26 to just £11.

“So far, large suppliers have installed more than 11 million smart meters, however this is just a quarter of the 46 million existing meters that could potentially be replaced,” the organisation said.

The latest update builds on an analysis from February this year, which calculated that large energy companies would need to install 24 smart meters a minute to meet the deadline. It adds that far from speeding up the rollout has slowed down in recent months.

“Energy suppliers maintain that they will meet the 2020 target, but as the deadline draws closer, Which? believes this is looking increasingly unlikely and more must be done to ensure that all consumers are offered the opportunity to benefit from upgrading to a smart meter,” the group said.

“The smart meter rollout has been plagued by problems and been massively delayed, the benefits have been overstated and the savings they could bring consumers are at risk,” added Alex Neill, Which? managing director of home products and services. “Therefore it’s time for the government to replan with industry and consumer groups to ensure people get the maximum benefit at the minimum cost.”

Smart meters and related smart grid technologies are wiodely regarded as crucial to efforts to improve energy efficiency and decarbonise UK power supplies by enabling more intelligent management of electricity supply and demand.

The government has consistently defended the handling of the roll out and a spokesman for the Department for Business, Energy, and Industrial Strategy today said the project had already seen millions of people seize the opportunity to “take control of their energy use to cut their bills”.

He added that the projected £11 a year reduction in annual fuel bills was “not insignificant” and would deliver £300m of savings across the economy in 2020 alone.

A spokesman for trade body Energy UK offered a similar take. “Energy suppliers are committed to meeting the government’s deadline of ensuring all eligible households and businesses are offered a smart meter by 2020,” he said. “The industry is working hard to reach as many customers as possible and to ensure the rollout is carried out safely, efficiently, cost-effectively and delivers a positive experience for customers. With more than 12 million smart meters now installed in Great Britain, more and more customers are enjoying the benefits that smart meters bring and are reporting high levels of satisfaction.”

Robert Cheesewright, director of corporate affairs at Smart Energy GB, the body tasked with managing the smart meter roll out, said: “Britain’s smart meter rollout is a vital upgrade for the nation’s energy infrastructure. Smart meters are crucial if we want to tackle climate change and reduce our carbon footprint. In line with the government’s figures, smart meters will help people save on average almost £50 a year on their energy bills by 2030. Energy suppliers are working hard to offer all households smart meters as soon as possible.””


Oil and Gas UK welcomes publication of draft Brexit deal

Oil and Gas UK (OGUK) has welcomed the long-awaited publication of the draft Brexit withdrawal agreement.

The 585-page document sets out the terms of the UK leaving the European Union.

OGUK, which represents the North Sea industry, has welcomed its publication, and said it will continue to put forward its priorities to the government over discussions “in the coming days”.

It said it remains focussed on protecting the workforce, trading with the EU, the internal energy market and its license to operate.

The draft agreement states EU citizens living and working in the UK (and vice versa) will have their rights protected after Brexit.

Along with the withdrawal agreement, the UK government and the European Commission have published a shorter document setting out the Britain’s future relationship with the EU.

Some points relating to the energy sector feature, specifically on having mechanisms in place to “ensure security of supply and efficient trade”.


Deirdre Michie, chief executive of Oil and Gas UK, said one of the organisation’s priorities is to maintain a strong voice in Europe.

She said: “We welcome the further detail provided to industry through the draft withdrawal agreement. This is an extensive legal document which we will now analyse and review in full with our membership.

“Our focus remains on securing the best outcome for the UK’s offshore oil and gas industry. That is, protecting the offshore industry from future EU regulatory changes, minimal friction between the UK and EU, maintaining a strong voice in Europe, protecting energy trading and the internal energy market and protecting our licence to operate.

“We will continue to put forward these priorities in our discussions with the Government in the coming days.”


Energy firms SSE and Npower renegotiate terms of merger

Energy firms SSE and Npower are renegotiating the terms of a merger of their UK retail operations, blaming the introduction of an energy price cap.

The merger, which has been cleared by the regulator, is set to create the UK’s second-biggest energy company.

Both firms said they still thought the merger had benefits, but that any final deal was likely to be delayed.

An energy bill price cap of £1,137 a year for “typical usage” is due to come into force in the new year.

It means suppliers will have to cut the price of their default tariffs to the level of the cap or below it.

Energy bills to be capped in new year

Watchdog clears SSE-Npower merger

Households to benefit from energy price cap

The government introduced legislation earlier this year to establish the price cap following concerns about how efficiently the energy market was working.

In September, SSE said the cap would lead to “significantly lower” profits than it had expected at the start of the financial year in its retail arm.


The energy firm said it had become apparent that the impact of some “recent market developments”, including the price cap, meant that the “commercial terms associated with the proposed combination will need to be reconsidered”.

As a result, SSE and Npower’s German owner Innogy were in talks “regarding potential changes” to the commercial terms of the deal, it added.

SSE chief executive Alistair Phillips-Davies said: “We continue to believe that creating a new, independent energy supplier has the potential to deliver real benefits for customers and the market as a whole, and that remains our objective.”

Talks will take place over several weeks, with an update on progress in mid-December.

‘Adverse developments’

The two companies were aiming to complete the merger – which would cut the “Big Six” energy firms down to five – in the first quarter of 2019.

However, SSE said it was now not likely to be done by then.

Innogy said in a statement that “adverse developments in the UK retail market and regulatory interventions such as the price cap have had a significant impact on the outlook for the combined retail company”.

It said the negotiations would include talks about “potential additional direct or indirect financial contributions by each party”.

Earlier this week, energy regulator, Ofgem said the cap would save 11 million customers an average of £76 a year on their gas and electricity bills.

Households in England, Scotland and Wales on default tariffs – such as standard variable tariffs – stand to benefit. Consumers in Northern Ireland have a separate energy regulator and already have a price cap.

More than half of all households in Britain are on default tariffs because they have never switched or have not done so recently.