Loading...

Helping you make sense of the energy and water sectors

Publications

Chart of the Week

2019

TPIs earn 20% more from business energy deals

Molly Lloyd Analyst

Third Party Intermediaries (TPIs) operating in the business market in 2019 have once again seen a year of significant change. Published last week, Cornwall Insight’s 2019 Annual TPI report found that, when negotiating business energy contracts in 2019, TPIs could target a £395mn/year revenue pool, 20% more than was available in 2018. In this week’s Chart of the Week we look at how higher commissions and increased TPI penetration have led to a growth in revenue for the SME segment while the Industrial & Commercial (I&C) sector saw revenues remain stagnant. Looking at the SME sector, Figure 1 shows that the total revenue for TPIs operating in this segment was £225mn, an increase from £155mn in 2018. The growth in revenue for the SME market is partly due to the higher commissions seen in this sector. Suppliers competing to attract TPIs to promote their contracts to businesses has pushed typical commissions for new acquisition contracts significantly above inflation, with higher payments of commission being secured by TPIs selling multi-year contracts. TPIs are now serving over 40% of SME energy contracts up from just 13% recorded in our first 2014 TPI market report. The larger SME TPIs are now managing contract portfolios of a similar size as some small and medium suppliers and therefore have more influence to seek better terms from suppliers, as well as having more bargaining power when it comes to commissions. In contrast, revenues for TPIs from I&C energy contracts continue to stagnate, dipping slightly ...

To keep reading, please log in to your account

Alternatively, please sign up to receive
free market insight online and direct
to your inbox



Who we work for