Weekend press round-up: Troubled Bulb Energy wins stay of execution

In our latest review of sector coverage in the national newspapers, it is claimed that Bulb has struck a deal to delay repaying £55 million of loans. Meanwhile, new figures show gas use in April and May was up by a third and electric vehicle charge points are to get an “iconic” makeover.

Troubled Bulb Energy wins stay of execution

Bulb Energy has been granted a stay of execution by lenders as it grapples with a spike in wholesale prices, spiralling customer complaints and the resignation of its co-founder.

The loss-making electricity and gas provider, which has 1.7m customers and is backed by billionaire Russian-Israeli entrepreneur Yuri Milner, has struck a deal to delay repaying £55m of loans until the end of next year.

The deal comes just months after co-founder Amit Gudka’s surprise decision to quit in February.

Bulb was forced to hike its prices in April and May as it grapples with soaring costs. Tariffs were also increased twice in 2020. Wholesale energy prices have doubled over the last year and risen a third since March.

Meanwhile, customer dissatisfaction has risen. It was the most complained about large supplier in the first three months of 2021, attracting 3,265 complaints per 100,000 customers, according to energy watchdog Ofgem.

The complaints, more than three times the number received by British Gas, compared with 689 per 100,000 Bulb received during the same period in 2020.

Bulb was forced to pay out £1.8m in refunds and compensation and redress last August after overcharging customers. “We’re sorry. We will do better,” it said at the time.

Bulb was set up by Mr Gudka, an energy trader, and former Bain & Company management consultant Hayden Wood in 2015 to steal market from the so-called “big six” energy suppliers: British Gas owner Centrica, E.ON, Scottish & Southern, RWE, npower, EDF Energy and ScottishPower.

Mr Milner, the businessman behind Russian internet firm Mail.Ru backed the duo alongside American hedge fund Magnetar Capital.

It has grown from just 30,000 customers in 2017 to 1.7m currently and has expanded into France, Spain and the US. The supplier doubled turnover to £1.5bn in its most recent accounts, for the year to March 2020.

The race to secure market share has come at a cost, however. Bulb racked up losses of more than £220m between 2017 and 2020.

Bulb has been able to pay for some of its expansion through upfront payments from customers. It had £107m of deferred income, believed to be charges paid in advance, in its most recent accounts, double that held in the previous year.

Loans totalling £55m were due to be repaid in December 2021. However, Bulb has been granted a one-year extension by its banks.

A Bulb spokesman said: “We’re proud to be named the fastest growing company in Europe, providing excellent service, fair and transparent prices and green technology to help people save money and reduce carbon emissions.”

Sunday Telegraph

Spring cold snap meant households used a third more gas to heat homes

A Spring cold snap across Britain meant households used a third more gas to heat their homes in April and May, new figures have revealed.

Whilst the UK may currently be basking in a heatwave, temperatures in April and May were so cold that gas usage was up a huge 36 per cent in May and 25 per cent in April compared to normal average usage levels for these months.

Torrential downpours hit the UK throughout May, and an exceptionally cold April meant it was the frostiest April for at least 60 years, according to the Met Office.

In some regions of Britain usage was up by over 50 per cent compared to seasonal averages. In South Wales gas usage in May was 54% higher than the four-year average, whilst in the North West, South West and West Midlands it was 43 per cent higher, according to Shell Energy, which obtained the figures from smart meter data from its almost 1m household customer base.

Average temperatures across the UK in April were just 5.7 degrees Celsius – almost two degrees colder than the long-term average. May didn’t fare much better, with temperatures rising only slightly to 7 degrees.

Households in Scotland were more likely to resist turning up the thermostats, with just a 4 per cent increased usage in April compared to the four-year average, despite minimum temperatures dropping to -0.4 degrees, according to the Met Office.

Elvin Nagamootoo, Head of Product, Shell Energy Retail said: “Spring certainly had not sprung by the end of May this year, although we are now enjoying a marvellous start to June. Throughout April and May, the colder weather saw Britain reach for the thermostat resulting in a large spike in household gas usage compared to  the rolling four year average.”

Sunday Telegraph

Electric vehicle charge points to be redesigned in bid to give them status of red pillar boxes

Electric vehicle charge points are to be redesigned in an attempt to make them an “iconic” sight on the UK’s streets like red pillar boxes.

A contract worth £200,000 has been advertised by the Department for Transport to secure a design team for the project.

Officials from the government’s Office for Zero Emission Vehicles want the successful bidder to develop an “iconic, functional public electric vehicle charge point”.

Sir John Hayes, a former transport minister, said that he hoped the charge points would become a “design classic” similar to the red pillar box or the red phone box.

Hayes, the Conservative MP for South Holland and The Deepings in Lincolnshire, said: “We do need to think of something like the Gilbert Scott phone box or the pillar box, something that people can immediately identify and it should be something that of itself becomes a design classic.

“We shouldn’t see this merely as a piece of utility although, of course, it provides a utilitarian purpose. We should see it as something that adds to the street furniture around our towns and cities.

“That’s why the design becomes critical, not only so that it’s recognisable but also that it’s something people enjoy seeing.”

The contract is expected to run from August 9 this year, with the advertisement stating: “Our aim is for the design to be a guide for local authorities and companies who wish to use it. As the charge point rollout continues to accelerate, there is potential for this design to become a piece of iconic British street furniture.”

A survey last year by the carmaker Seat found that a third of motorists believed that electric vehicle charging points were eyesores.

The Times

Former COP26 chief says there is ‘question mark’ over event taking place

The COP26 climate change conference due to take place in Glasgow in November may not go ahead because of a lack of progress in lead-up talks, its former chief has said.

Claire O’Neill said there was now a “question mark” over whether the two-week event at the SEC would take place as planned or be delayed.

She also urged the leaders of the G7 countries meeting in Cornwalll this week to set the right tone, given the urgency of the climate crisis, to help ensure the Cop took place.

Ms O’Neil, a former energy minister formerly known by her married name as Claire Perry, was nominated as Cop26 president in September 2019.

However Boris Johnson sacked her a few months later in order to install a serving minister in the role, giving it to then business secretary Alok Sharma.

Speaking to BBC Scotland’s Sunday Show, Ms O’Neill the 198 parties to the Cop were currently in virtual negotiations, but were failing to advance as required.

She said: “The reason for Cop to happen is a series of negotiations which have to happen in 198 directions, and they are not as focused as people would expect on this enormous climate emergency and the need for really rapid action.

“If you think now that those negotiations are happening virtually for three weeks, there is a question mark, truthfully, over whether the negotiations will happen at Glasgow at the end of the year.

“I’m hearing from very reliable sources that at the end of this virtual negotiation period, the parties, the 198 parties, will decide whether they’ve made enough progress to go ahead in Glasgow. And of course there is then a question about in-person or virtual [attendance], because some countries find the idea of virtual negotiations to be very difficult.

“If the G7 could do one thing, it would be basically to set the tone that we have to have this Cop. We’re two years late, the evidence is so stark about the need for action.

“The world’s businesses are lined up ready to act on this. Wouldn’t it be incredible if we couldn’t have a full cop in Glasgow because the negotiators couldn’t agree?”

The Herald Scotland

Investors to join Cornish ‘gold rush’

A start-up planning to mine lithium in Cornwall for electric vehicle batteries is preparing to tap investors for cash at a valuation of more than £80 million and aims to list in London next year.

Cornish Lithium hopes to start producing the key ingredient in electric vehicle batteries as soon as 2025 to provide homegrown supplies for proposed “gigafactories” in Britain.

The company is aiming to capitalise on the spotlight on Cornwall from next week’s G7 Summit by launching a crowdfunding campaign as soon as the following week. This will come after an oversubscribed crowdfunding last October when it raised more than £5 million at a valuation of £40 million.

Jeremy Wrathall, its chief executive, told The Times that he wanted to pursue an initial public offering as soon as possible, which is likely to be on Aim, London’s junior stock market. “The soonest possible window would be the end of this year, the more likely window would be the first half of 2022,” he said.

Global lithium demand is expected to at least treble this decade as the world switches to electric vehicles, alongside predictions of a supply shortage until more mines are developed.

Cornish Lithium claims to have discovered a “globally significant” grade of lithium in deep geothermal waters near Redruth. However, the technology for extracting the metal is not yet commercially proven.

The company has secured government funding to build a pilot plant. It is also preparing to mine lithium from granite rock in a disused china clay mine near St Austell and believes that the mine could yield at least 10,000 tonnes of lithium carbonate a year.

The Times

Companies must commit to net-zero emissions before bidding for government contracts

Businesses will have to commit to the UK’s 2050 net-zero target before they can bid for major government contracts, under new rules announced on World Environment Day.

Firms will also have to publish “credible” carbon reduction plans setting out their existing greenhouse gas emissions such as fuel usage, power consumption and staff travel.

The Cabinet Office said the measures would be put in place by September for contracts worth more than £5m, making the UK government the first in the world to require such commitments.

It comes as the UK prepares to host the 2021 United Nations Climate Change Conference, also known as Cop26, in Glasgow in November.

“The government spends more than £290bn on procurement every year, so it’s important we use this purchasing power to help transform our economy to net-zero,” said the minister for efficiency and transformation, Lord Agnew of Oulton, in a statement.

“Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world leading approach. These measures will help green our economy, while not overly burdening businesses.”

Carbon emissions will be reported using an internationally-recognised standard which categorises them under three groups or “scopes”.

While some large companies already report scope 1 and 2 emissions, the new rules will also require some scope 3 emissions to be included as well.

Firms failing to meet the requirements will be excluded from bidding for contracts worth more than £5m per year.

The government said that the £5m cut-off was designed to “not overly burden and potentially exclude small and medium sized enterprises (SMEs) from bidding for government work”.

The Independent

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.