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How to start an Electric Supply Company in the UK

Matt Olney • Jan 24, 2020

The increased number of electricity supply companies has made the energy sector more competitive. Gone are the days where the 'Big Six' reigned supreme, now there are dozens of challengers. In this article, we explain how you too can start an electric supply company.

Getting an Electricity Supply Licence

In order to enter the electricity market in the UK, all energy suppliers must attain an electricity supply licence which is issued by the energy regulator Ofgem.

Dyball Associates assists new market entrants by providing expert consultancy advice that helps you navigate the processes and red tape to give you the best start as a fully compliant business.

Applying for a licence follows a set of strict procedures that must be adhered to and often takes around 55 days to complete.

Meeting all the requirements can be a complex business, but this is where our specialists at Dyball Associates come in. Our expert consultants will guide you through the application process, allowing you to avoid mistakes and get into the electricity market quicker.

To obtain a license, a business needs to comply with numerous UK and EU legislation and industry codes. All of the most important ones can be found here .

As well as those pieces of legislation, your business will also have to consider others related to operating a business in general and legislation such as GDPR for data handling.


For more information visit – Getting an Electricity Supply Licence


Licence Lite

Unlike gas suppliers, new electricity companies have the option to go down a licence lite route which can reduce the time to market. This works by partnering with an existing supplier already in the industry to assist with some of the challenging parts of getting started. If this route is appealing, you will have to make a declaration within the licencing process. More information can be found in the Ofgem factsheet.

Ofgem, the BEIS and Elexon

As an electricity supplier, you will regularly have to deal with Ofgem, the Department for Business, Energy and Industrial Strategy (BEIS) and other regulatory bodies in order to satisfy them that you and your business have consumer interests at heart.

The most important interaction you will have with Ofgem is fulfilling their reporting requirements where you will have to provide data on various metrics.

Elexon administers the Balancing Settlement Code (BSC) for the UK electricity industry ensuring that all qualified parties operate within the codes framework. All UK Electricity Suppliers must be party to the BSC. Qualification can take up to a year but with Dyball’s assistance, this can be done within four to six months.

Dyball Associates offers a full market entry consultancy, guiding new electricity suppliers through both the licence application process and the qualification procedures.


For more information visit – Achieve your Elexon Accreditation

MRASCo

To supply electricity your business needs to first make deals with electricity distributors, this is where the Master Registration Agreement (MRA) is designed to manage the industry processes and rules that exist between suppliers and distributors.

All UK electricity suppliers must be party to the MRA as it governs the rules that must be followed in obtaining and keeping electricity customers.

For more information visit – What is MRASCo?

Making a Success of it

We’re not going to sugarcoat it. The UK energy supply market is a tough one for the unprepared and the none committed.

Being unable to meet the requirements set out by Ofgem, for example, has caused the downfall of many new market entrants.

It’s a hugely competitive market and there are many issues such as the challenges posed by the energy price cap , smart meter rollout and the drive for cleaner renewable energy.

Despite these challenges, the well prepared and those with a solid business plan can thrive. Look at the success stories such as Octopus Energy and the rapidly growing Bulb.

The Customer is King

The biggest difference between those electricity supply companies that survive and thrive and those that crash and burn, is often down to how they provide for their customers such as whether they provide cheaper energy tariffs to help them save money or offer great customer service.

Well-staffed customer service response services , quick and accurate billing, excellent deals and customer engagement are key to attaining a loyal customer base.

With the ability for customers to switch their supplier easier than ever it is those companies that regularly appear at the bottom of the consumer satisfaction charts that are at most at risk of failing.

Implementing effective management systems such as Dyball’s Customer service management system (CSM) allows a supplier to handle billing, marketing messaging and PSR compliance in one place making it easy to manage your customers’ needs quickly and efficiently.

Further Reading

Energy Price Forecast 2020

Inaccurate billing most common complaint against Energy suppliers

Top Tips to Increase Energy Company Satisfaction


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.

Follow us on Twitter and LinkedIn to keep up to date with the latest news and updates in the energy industry.

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