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Engie, the French utility company, has shrugged off concerns about a clampdown on the UK energy market to launch a household supply service.
It is the biggest supplier to enter the UK domestic market in the last 15 years but Wilfrid Petrie, head of Engie’s UK business, said it does not want to become as large as the “big six” suppliers.
“We do not want to be a ‘big seven’ [supplier] that’s not what this is about,” he said.
Engie is seeking to differentiate itself from other big suppliers by promising to automatically move customers on to its cheapest available tariff when their fixed price deal comes to an end – rather than on to a “standard variable tariff”, the hated rate that Theresa May is seeking to tackle with a proposed energy price cap.
Engie estimates UK customers could save £3bn by switching from expensive standard rates to cheaper deals on the market. This equates to a saving of about £175 per customer.
The French company plans to offer a range of fixed deals as well as a tracker product that moves in line with wholesale energy prices. All electricity provided through each deal will be 100 per cent renewable, it said.
However it will offer an equivalent to the standard variable tariff, which it has branded its “safe and easy” product.
The group believes its promise to automatically move customers on to its cheapest deal will be a “game-changer”.
Engie already has a considerable presence in the UK. It is among the ten biggest suppliers of energy to businesses and provides outsourcing services such as looking after government buildings and monitoring the temperature of the water at the London Aquatics centre, which was built for the 2012 Olympics. It also has 4GW of electricity generation capacity.
The company said its cheapest deal – a fixed product – is currently £880 a year but Mr Petrie admitted it is not expecting to make big profit margins on the actual supply of energy.
It is aiming to sell a range of services around basic energy supply, such as boiler maintenance and technology that helps people to control their heating via tablet or smartphone apps and make decisions about when they use their electricity.
Engie is also hoping to work with local councils to become a supplier to social housing projects.
Mr Petrie compared energy supply to the telecoms industry. “Nobody makes money on the landline anymore,” he said, adding it was products such as broadband and other services that generate profits for telecoms companies.
Image via Reuters