Shell enters the UK energy market with First Utility deal
Oil giant Shell is looking to take on the Big Six energy suppliers by agreeing to buy First Utility, for an undisclosed sum.
The move will give Shell 825,000 electricity, gas and broadband customers in the UK.
The deal is still subject to regulatory approval and expected to be completed in March next year.
First Utility, which has become the largest challenger to the Big Six energy providers, will operate as a stand lone entity in Shell’s New Energies division.
"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," said Mark Gainsborough, Shell’s executive vice president of New Energies.
The news comes at a challenging time for energy firms in the UK.
In October, Theresa May pledged to introduce legislation to end "rip-off" energy prices by putting a price cap on bills.
The Big Six energy suppliers are also being challenged by increase competition from smaller providers and the deal is likely to pile further pressure on them.
Despite the UK’s biggest energy providers making more than £1bn last year, they are losing millions of customers who are switching to smaller rivals for a better deal.
There are currently 60 suppliers offering electricity and or gas, 16 more than last year.
Since 2012, new suppliers have intensified competition, shrinking the six largest energy suppliers’ share of the market from nearly all consumers to just over 80pc of them, according to energy regulator Ofgem.
Annual household switching rates reached almost 17pc in June 2017, the highest since August 2011.
Independent News Service