Energy firms unconvinced on water opportunities

Smaller energy suppliers show tentative interest in the competitive water market but most have “no plans”

The majority of energy suppliers remain unconvinced that the business water market will be worth entering when it opens in April, and say they have “no plans” to do so.

In a straw poll, only Yu Energy, D-Energi, Xcel Energy and Corona Energy told Utility Week they did have plans to enter the water market, while BES Utilities, Flogas and Robin Hood Energy said “maybe”.

However, the majority of suppliers, including Flow Energy, Good Energy, Hudson Energy, Haven Power, Engie, Dong Energy, Smartest Energy and Co-operative Energy, all said they have “no plans” to enter the market.

From April this year, around 1.2 million eligible businesses and public bodies in England will be able to choose their water supplier, an option only currently available to the largest users. It will link to the existing market in Scotland, which was created in 2008 as the world’s first non-domestic water market.

With an average retail margin of 6 per cent gross, it is unlikely that there will be enough money in the market to tempt the larger energy players.

Of the big six, Eon, British Gas and SSE declined to comment, EDF and Npower said they had “no plans”, and Scottish Power had not responded to a request for comment at the time of the publication of this article.

Utility Warehouse said it intends to move into the domestic market if and when it is deregulated, but “at the present time we have no plans to enter into the business water market”.

Regent Water – a subsidiary of gas supplier Regent Gas – applied to Ofwat for a water supply and sewerage licence in September last year. However, the firm is still yet to be granted this licence.

Ecotricity chief executive Dale Vince exclusively told Utility Week in an interview late last year that the company is interested in the water market, and would look to bring “an eco-approach to water”.