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UK energy suppliers throw down the gauntlet to Shell Energy

Image: E.On.

Image: E.On.

Energy suppliers in the UK have thrown down the gauntlet to Shell, challenging its newly-rebranded energy supply outfit to “bring it on”.

Last Monday Shell unveiled its rebrand of First Utility to Shell Energy, attaching its O&G brand to the energy supplier for the first time since it completed its acquisition almost a year ago.

That rebrand brings Shell into direct competition with not just the ‘Big Six’, but a host of other energy firms with UK supply interests including BP, which owns a minority stake in digital energy supplier Pure Planet.

The announcement caused a stir in the UK energy scene but, speaking at last week’s Future of Utilities Summit, the chief executives of both E.On UK and Engie were unmoved.

“Bring it on,” said E.On’s Michael Lewis, who remarked that suppliers had become accustomed to change during a “turbulent few years” that had seen their understanding of industry norms “blown apart”.

Engie’s Wilfred Petrie was more philosophical about the increased competition, commenting that the challenge is now “beyond supply”, insisting his firm stood ready and “welcomed competition” in the market.

However the move has not been well received by the market in its entirety, with independent green power supplier Good Energy taking aim at Shell’s pledge to supply all of it customers with 100% renewables.

In a blog published by the firm last week, Good Energy noted how First Utility’s last-published energy mix disclosure revealed that just 3.7% of its power originated from renewables. Nearly two-thirds – 62% - originated from gas-fired power plants with nuclear the next largest contributor at 19%.

Good Energy questioned how the fuel mix had soared from just 3.7% to 100% “without a single article showing partnerships or contracts with a renewable provider”, using the feat to criticise the “loophole” of purchasing Renewable Energy Guarantee of Origin (REGO) certificates to count as supply.

“We see the REGO loophole being exploited more and more. Instead of ‘providing transparency to customers’ REGO trading is actually hiding the difference between fossil fuel based suppliers like Shell Energy and suppliers who go to the extra effort and expense to contract directly with renewable generators and buy real green power,” the blog’s author and senior forecasting analyst at Good Energy, Thomas Harrison, writes.

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