Energy consumers shop around as 200,000 leave EDF energy

20 March 2019 Consultancy.uk

As rising utilities prices exert ever more pressure on consumers seeking the bare necessities of power and water, the UK’s market has often been slated by critics for forcing many consumers to “choose between heating and eating”. However, thanks to new disruptors improving the competition of the market, one of the UK’s largest energy suppliers has seen hundreds of thousands of empowered customers go elsewhere in the last year.

According to the recent Digital Vision for Energy and Utilities report by Atos, a combination of factors are making it more likely for consumers to switch between providers. Drives in the UK to make it easier to switch energy providers – as well as increased local energy generation and the proliferation of intelligent home devices – are disrupting the utilities market, providing new opportunities to create a nation of professional consumers.

By Atos’ reckoning, that would see digital disruptors seize a fifth of the UK utilities market by 2020. Supporting this, earlier in 2018, an Ofgem report found that the six largest suppliers of the UK energy market had seen their market share fall to 79% for electricity and 78% for gas in December 2017, down from 84% for both a year earlier.

Energy consumers shop around as 200,000 leave EDF energy

Now, a release from EDF Energy, one of the Big Six energy suppliers of Britain, has confirmed that the firm lost 200,000 customers over the course of 2018. Two large price hikes last year seem to have been enough to drive a large number of customers from the firm last year. Citing a "highly competitive" market, EDF also found that earnings for its UK business had tumbled by 16.5% to £691 million in the year to December 31.

Speaking to the Daily Mirror, Victoria Arrington of energyhelpline stated, “It’s no surprise that a major supplier had trouble keeping customers through the troublesome times of 2018. A loss of 200,000 customers may seem like a drop in the ocean compared to their 5 million or so total customers, but it shows that the energy market is experiencing tough times right now. Rising wholesale prices, as well as over 70 suppliers in the market competing for business, have made it difficult for the Big Six to keep hold of their grip on the market."

One in five UK domestic energy customers switched their provider in 2018 - an increase of 6% on the previous year, marking the highest number since records began. Of those who moved, 1.7 million customers switched to a small or mid-tier supplier. Following its fall of 200,000 customers, EDF Energy held 3 million residential electricity accounts and 1.9 million gas customers at the end of last year

Peter Earl, head of energy at comparethemarket.com, remarked, "December saw a switching surge away from the Big Six. Of the challengers, So Energy and Avro Energy emerged as the big winners."

Despite the rise in competition, though, EDF did benefit to an extent from customers feeling more empowered to change energy providers. Sales for 2018 came in at £7.9 billion, representing a rise of 3.9%; however, a price cap in the market is set to see its revenues fall further this year. EDF was forced to cut prices in January with the introduction of an energy sector price cap, and while regulator Ofgem has since increased the cap, EDF will only be able to raise its prices in line with that from 1 April – when they will rise by 10% for people on standard variable rate tariffs.

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WEF finds no progress made on greening economy

01 April 2019 Consultancy.uk

The reports of two influential bodies, in the space of a day, have warned that no progress is being made to prevent major climate change. The World Economic Forum has warned that greening of the global energy transition has stagnated over last five years, while the International Energy Agency has confirmed coal use rose again last year.

The position of the Academies of Science from 80 countries, plus a majority of scientific organisations that study climate science, is that humans are causing rapid climate change – often referred to as global warming. Roughly 95% of active climate researchers publishing climate papers endorse the consensus position that since the industrial revolution, the boom in carbon emissions from fossil fuel powered human activity has heavily impacted the planet, with rising levels of CO2 and other greenhouse gases trapping heat from the sun causing global temperatures to rise – something which will have catastrophic results in the near future.

Despite the steadfast consensus among the scientific community on the matter, however, there has been little to no meaningful action to avert disaster. In fact, while the signing of the Paris Accord was met with great excitement, since it came into force, global carbon dioxide emissions have continued to rise. Today, they sit at their highest levels yet, after a strong economy and extreme weather stoked a surge in energy demand last year.WEF finds no progress made on greening economyAccording to the world’s energy watchdog, the Paris-based International Energy Agency (IEA), energy spiked by 2.3% in 2018 – the biggest leap since 2010 – with that demand largely being met with fossil fuels. As a result, global emissions of carbon dioxide hit the record high of 33 billion tonnes in 2018, a rise of 1.7% on 2017’s figures. Commenting on the findings, IEA chief Fatih Birol said the rise in energy demand was “exceptional” and a “surprise for many.”

Birol added, “We have seen an extraordinary increase in global energy demand in 2018, growing at its fastest pace this decade. Looking at the global economy in 2019, it will be rather a surprise to see the same level of growth as 2018.”

The suggestion from Birol that 2018 is likely to be an anomaly which will not be seen again is strange, considering the added strain which the boom in emissions will place on the environment. To suggest that heightened energy demand was driven by extreme weather – which is increasingly difficult to claim is unrelated to man-made climate change – and then to suggest that such a thing is unlikely to occur any time soon in spite of emissions having increased seems contradictory.

Regardless of this, the bad news was further compounded within hours of the IEA’s release. A report from the World Economic Forum released on the same day concluded that the world's energy systems have not become any greener in the last five years. Despite the agreement of global climate targets, falling green power costs, and mounting public and business concern over the catastrophic impacts runaway climate change could wreak, the WEF’s damning assessment warned that little to no progress has been made on making energy systems more environmentally sustainable since 2014.

Coal is the largest hindrance of change on this front, according to the report. Recent years have seen improvements in energy access and security, but far too many nations remain dependent on coal power for the new energy systems to have made any environmental gains. At the same time, major economies have failed to decrease or even slow the amount of energy they use per unit of GDP, leaving smaller actors who have made changes micturating into a gale. Change on the part of the world’s largest economies is therefore crucial to driving the development of a greener, more efficient global economy, the WEF concluded.

Commenting on the findings, Roberto Bocca, leader of the WEF's future of energy and materials division, said urgent action is now needed to move toward decarbonisation. He added, "We need a future where energy is affordable, sustainable and accessible to all. Solid progress in bringing energy within the reach of more and more people is not enough to mask wider failures, which are already having an impact on our climate and on our societies."

The news comes even as sustainability continues to be talked about as a ‘top agenda item’ at the majority of the world’s largest corporations. While 85% say that it will be more important still in another five years, it is clear that the majority of the world’s most powerful businesses are failing to walk the talk on the matter, regardless of what governments do.