Business water customers put off by self-supply risks

Few self-supply applications have come in so far because of business customer nervousness

Business customers are hesitant to apply for a self-supply licence, in both England and Scotland, because of a lack of awareness about what it means and a nervousness about the language associated with it.

Waterscan director Claire Yeates told Utility Week that “as soon as you drop the words ‘compliance’, ‘regulation’ and ‘licence obligation’ into a conversation, it sparks an element of nervousness”.

“I think it’s a challenge that many businesses aren’t fully aware of what it means,” she said. “Some people in the market, when they talk about self-supply, think that they’re going to have to be involved in the treatment and so forth of their water.

“There’s a misunderstanding with it within the market, and to be honest it isn’t something that’s been heavily promoted, it’s not been well-publicised.”

Yeates also said there are “certainly” more self-supply deals on the horizon, and that applications look set to rise, after brewer Greene King partnered with Waterscan to provide its own water retail services when the market opens.

Water Industry Commission for Scotland head of competition Charles Yates agreed, saying that although there had been previous enquiries about self-supply before Earls Gate, they did not turn into licence applications.

“This maybe because retailers and consultants weren’t pushing self-supply up as an option before in Scotland,” he told Utility Week. However, he added, self-supply is now starting to happen in Scotland because the opening of the English market has made business customers think about how they could be saving money.

Water Self Supply, a company set up to provide support for businesses which are thinking of switching to self-supply, said there is a level of risk associated with self-supply, but if it is done correctly there is no more risk than using a retailer. 

Director Anthony Giliker told Utility Week there are currently customers interested in self-supply, but added that interest would increase over “a number of years”, rather than a lot of applications coming in at once.

He suggested that self-supply had taken so long to get going in Scotland because the terms between the wholesaler and self-supplier were quite onerous and required a lot up front. However, this is not the case in England and is no longer the case in Scotland, he said.

“There are also fewer multi-site customers in Scotland than there are in England, hence the slow uptake,” he added. “But now a lot of companies have sites across both Scotland and England so there are a lot more companies with significant multi sites across both markets.”