Helping you make sense of the energy and water sectors

Market research & Insight

Issue 28

Themes this quarter Financial squeeze on large suppliers continues The interim results of the large suppliers for the first half of 2017 typically showed a reduction in non-domestic EBIT compared to H116, including where their parent companies were showing solid group performance. For example, Centrica Business, which includes energy services and supply in North America, saw operating profit grow £141mn in H1 2017, whilst the non-domestic arm of British Gas broke even, after making a £31mn profit last year. This trend among large suppliers was broadly attributed to reduced consumption due to warmer weather, continued customer losses and lower margins, with npower and Scottish Power citing higher industry costs and government obligations specifically. Elsewhere interim results were more positive. Both DONG Energy (group) and Yu Energy announced better than expected growth, leading the former to raise its full-year EBIT outlook. Good Energy announced a renewed focus on the non-domestic market, stating that it had seen a 103% increase in the volume of half-hourly electricity it supplied in H117 and saw scope for further growth of SME contracts. Non-domestic switching estimates For the first time this pack includes an approximation of non-domestic switching rates. By comparing net switching, after domestic accounts are accounted for, with the number of non-domestic meters as per Cornwall Insight’s market share survey, clear switching trends are visible. The chart on page 17 shows significant peaks in electricity switching in October and April, suggesting these dates are when most contracts are renegotiated. This trend is less pronounced ...

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