Shell to buy British retail energy supplier First Utility
21st December 2017 | Residential Energy
Royal Dutch Shell has agreed to buy British household energy and broadband provider First Utility, stepping up competition to the “Big Six” suppliers whose dominance of the market is already under pressure. Shell did not disclose any financial details of a deal which takes it into a new sector of the retail market. First Utility and Shell’s joint German subsidiary is also included in the agreement.
The retail energy market in Britain is still dominated by the Big Six – Centrica’s British Gas, Iberdrola’s Scottish Power, Eon, EDF Energy, SSE and Innogy’s Npower. However, they have been losing market share to smaller suppliers, including First Utility which serves around 825,000 homes in Britain.
“The supply and demand of residential energy is rapidly changing, driven by new technologies that enable householders to better manage their energy use, and the need for a low-carbon energy system,” Mark Gainsborough, Shell’s Executive Vice President of New Energies, said in a statement.
“This combination will enable Shell to enter a new part of the energy market in the UK and to improve choice for customers by delivering innovative services at competitive prices.”
Shell expects the deal to complete early next year, subject to regulatory and other approvals.
First Utility said the deal would allow it to grow quicker and develop new customer products and services, taking advantage of Shell’s broad range of investments, from renewables to electric vehicle charging. Shell wants 20 per cent of sales from its fuel stations worldwide to come from recharging electric vehicles and low-carbon fuels by 2025.
Shell Energy Europe Limited, Shell’s European gas and power marketing and trading business, will continue to supply wholesale gas and electricity to energy retailers in the UK and Europe, including First Utility, the firm said.
In 2015, Shell Energy Europe and First Utility partnered to launch a new household energy supplier in Germany.
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