While the discussion continues around the impacts of COVID-19 on energy suppliers, the effects have reached all parts of the energy value chain.
The latest research from Cornwall Insight’s ‘Third-party intermediaries in the business and industrial energy supply market report’ highlights the effects of the COVID-19 lockdown on the third-party intermediary (TPI) industry.
Molly Lloyd, Analyst at Cornwall Insight, said:
“It is unsurprising that COVID-19 was on the minds of TPIs this quarter, with the effects of the government lockdown measures causing a level of uncertainty unseen since the 2008 financial crash.
“At this time, the role of the TPIs as trusted, independent advisors has never been more critical as they help inform and explain any changes to their customers. Both energy suppliers and TPIs have seen the number of enquiries they receive from customers increase. However, handling these queries is taking longer due to most employees working from home.
“With the overall uncertainty for businesses, it has been challenging for TPIs to secure new business contracts. Alongside this, the furloughing of energy decision-makers in larger businesses has made completing existing contracts more difficult.
“Some suppliers have moved to focus on serving existing customers, while others are no longer looking to offer favourable terms to sectors that are more at risk. Those TPIs that receive a proportion of their commission from suppliers upfront may also face challenges, particularly if suppliers look to claw back a proportion of the payment relating to overestimated volumes.
“Demand for energy in the business market has reduced significantly as certain sectors have been put on pause or shut completely. If TPIs’ commissions relate to the volume of energy used by the customer, then the impacts of the reduced demand may be passed through to the TPI.”