The Newest Name In The UK Power Sector Is…Shell

The Newest Name In The UK Power Sector Is…Shell

Shell has begun selling electricity to customers in the UK using its own brand.

The firm bought existing service provider First Utility a little more than a year ago. The oil majors have not been shy to talk about getting involved in the power sector. Some have gone further than others, however. Shell’s position is to consider electricity as the fourth pillar of its business alongside oil, gas and chemicals.

As of today, First Utility’s brand has been replaced with Shell’s. The company was quick off the mark to signal the new direction of the business switching all of its 700,000 residential customers to 100% renewable electricity.

A Shell logo sits on a sign at a gas station, operated by Royal Dutch Shell Plc. Photographer: Jasper Juinen/Bloomberg

© 2018 Bloomberg Finance LP

Since the British electricity sector was privatized it has been dominated by the so-called “Big Six” companies but competitors have begun to gather momentum and find their own niches. Offering renewable energy is one such differentiator. Inevitably, the market leaders have begun to follow suit.

“We are building on the disruptive nature of First Utility to give customers something better. We know that renewable electricity is important to them and we are delivering that, while ensuring good value and rewarding loyalty,” said Colin Crooks, CEO, Shell Energy Retail.

“We want to attract customers with fair pricing, strong customer service and innovative offers that set us apart from anything available today. Later this year, we’ll be announcing a string of exciting services that offer greater convenience to householders and help make homes more efficient.”

Shell will continue to offer broadband, as First Utility did. Customers will also be offered smart thermostats and EV charging infrastructure.

Last month Shell completed the acquisition of high-end German energy storage firm sonnen. It would be foolish to dismiss a larger scale rollout of its battery systems. These can be connected together via the internet creating a virtual power plant (VPP) and the ability for customers within that network to trade power with one another.

In a nod to the wider shift at the company Mark Gainsborough, executive vice president at Shell New Energies, said: “This is a good example of our approach to building a significant electricity business, in line with customer needs. Shell recognizes the world needs more energy with lower emissions and this will give customers more flexibility, greater control and cleaner energy.”

The impact of the brand change may not be immediate for existing First Utility customers but it does represent the first time a household name among the major oil players has taken on such a large slice of the market. A number of smaller players in the UK have either merged or exited the market in the past year. But with scale, a long-term commitment to the market and a route to differentiation Shell’s chances of taking on the Big Six are built on a firmer foundation.

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