Digital Only Energy Supplier announced by Centrica

A new way?

The COVID-19 pandemic has had a large impact on the energy sector with many suppliers, unfortunately, having to cut staff in the face of a decline in revenue.

These new challengers are forcing energy suppliers to think of new ways to save money and continue to provide a high standard of customer service.

Going fully digital in this internet age is a savvy move as many consumers now do most of their utility management online or via smartphone apps.

If the new digital only company proves to be a hit with consumers then we can expect more energy suppliers to follow suit.

Want to enter the energy market? Dyball Associates can help. Contact us to learn more.

The evolving energy market

British Gas is still the UK’s largest provider of gas with over seven million customers but with more challenger companies entering the market in recent years it has been losing customers at a steady pace. In 2019 alone it lost close to 290,000.

Since former Prime Minister Theresa May announced that she wanted to shake up the market, end what she said were ‘rip-off prices’ and introduce more competition to the ‘Big Six’ over 60 new energy suppliers have entered the market. Some have failed others have succeeded spectacularly in a short space of time.

The former dominance of the Big Six is being challenged like never before and that is of concern to the likes of Centrica who reported a big loss in 2019 as a result of the introduction of the energy price cap (which Centrica opposed) and the record fall in wholesale energy prices.

Earlier this month, Centrica announced plans to cut 5,000 jobs to simplify its bureaucracy by removing management layers.

How will it work?

The new digital only service has been designed for UK homeowners and will provide consumers with a dual fuel tariff from British Gas.

For customers to join the service they will have to switch both their gas and electricity at the same time, pay for their energy usage via direct debit and have a standard meter. Those with smart meters can apply but will have to manually submit a meter reading every month.

According to Centrica all of the new company’s customers will receive a guaranteed rate for one full year.

Customers will be able to manage their switch, energy bills and account details via a dedicated website that is supported by a webchat service.

“We applaud British Gas for not resting on their laurels. Whilst new entrants to the market tend to be positive for energy customers, it will be interesting to see how Centrica materially differentiates their new business model from the existing British Gas brand. The success of British Gas’ decision to set up a wholly new body will be dependent on a range of factors, including the receptiveness from digitally-savvy customers to embrace the new brand, and attracting people from different age groups and geographical locations outside of British Gas’ existing customer base,” said Peter Earl, head of energy at Compare the Market.

Further Reading

Back to normality for the Energy Sector from July 1st and Ofgem says debt collecting can resume

Challenger Energy Suppliers should improve their mobile experiences says new report

Government announces plans to increase the speed of Smart meter rollout

 Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.