May must stop this merger of bloated energy companies. Winter is coming but developments in the energy market should already be sending a chill through consumers. Last week, two of the UK’s biggest suppliers, SSE and Npower, announced plans to merge. Executives at both tried their best to persuade us that the deal would be good for customers but even they didn’t seem convinced. Then again, there cannot be anyone who believes that allowing the Big Six to become the Big Five will help a single customer get a better deal.
Times 13th Nov 2017 read more »
The decisive blow was delivered months ago. But it was only last week that the energy industry realised two of its largest household suppliers had thrown in the towel. The shock decision by Theresa May, the Prime Minister, to legislate a cap on standard energy prices has spurred the biggest upset in the energy industry since privatisation. Britain’s second largest energy supplier SSE and Npower parent company Innogy will both cut their losses by spinning off their UK supply businesses to create a new venture they believe will be tough enough to compete in an industry far more politically hostile than the one the six largest suppliers first entered more than 10 years ago. The merger ushers in the deconstruction of the Big Six in the biggest shake-up of the industry in over a decade. From this alliance will emerge Britain’s largest electricity supplier, and a household gas supplier second only in size to British Gas. SSE promises a “new and different model” to the energy suppliers that have come before, in a pledge that acknowledges the sorely needed change called for by regulators and consumers for years. A victory would create a company with the vision and heft to stand at the forefront of an industry that is on the brink of reinvention. A failure would leave an unholy energy “Franken-firm” as a grim relic of the industry’s years of struggle against public mistrust and accusations of profiteering. It’s a gamble that Peter Terium, the boss of Innogy, says was “inevitable” against the rising competition in a market once ruled over by the six incumbents. The Big Six grip on the energy market has fallen from nearly 100pc 13 years ago to 82pc in the middle of this year as a new breed of energy supplier gains ground with building momentum.
Telegraph 11th Nov 2017 read more »
Joe Kaeser, chief executive of Siemens, had a provocative question for reporters last Thursday. Did they know how many large gas turbines were ordered in Germany in the past three years? “I’ll tell you,” he said. “A total of two!” Alongside its rival General Electric in the US, Germany’s Siemens has been one of the iconic companies of the industrial age. Both were founded in the 19th century — Siemens in 1847, GE in 1892 — and both built on their roots in the electricity industry to become corporate titans in the 20th century. Yet, as Mr Kaeser’s stark question suggests, both groups are facing similar threats in the 21st century, above all from the renewable energy revolution that risks rendering obsolete their century-old strengths in supplying equipment for the electricity industry. As the costs of solar and wind power have plunged, making them cheaper than fossil fuel generation in many parts of the world, the traditional model of the industry has changed. Capital spending on the new technologies has soared. Battery storage is also starting to be a cost-effective solution for supporting the grid, challenging the market for “peaker” gas turbines that are used when demand is at its highest. Yet both groups have taken positions in renewable energy but have stumbled along the way.
FT 12th Nov 2017 read more »
