Shell Energy Explained

Shell Energy Retail Limited
Industry:Utilities
Predecessor:First Utility
Successors:-->
Founded:2008
Founders:-->
Hq Location City:Coventry
Hq Location Country:United Kingdom
Area Served:United Kingdom
Key People:Tony Keeling, Chief Executive Officer
Products:Gas & electricity
Parent:Octopus Energy

Shell Energy Retail Limited was a British consumer gas, electricity and broadband provider.[1] Formerly a subsidiary of Shell, the business was acquired by Octopus Energy in December 2023.

The company purchased gas and electricity from international markets for resale to consumers. Originally known as First Utility, the company had a relationship with Shell, where it acted as an intermediary to purchase wholesale energy on the global market.[2] Shell completed the purchase of the company in February 2018, and rebranding to Shell Energy in the UK took place in March 2019. The business formed part of Shell's New Energies division until the 2023 sale to Octopus Energy.

History

First Utility was launched in 2008 by co-founders Mark Daeche, Darren Braham and Marcus Citron as a spin-out from First Telecom.[3] [4] In January 2012, the company appointed the former lastminute.com CEO Ian McCaig as its new CEO.[5]

As a small new entrant to the market, the company experimented with new technology. The company was the first in the UK to offer smart meters to its residential customers.[6] [7] This also gave the company experience of a large smart meter roll-out programme.[8] The company partnered with various other providers including oPower and Google PowerMeter to provide customers with access to usage data.[9]

Ofgem issued a disciplinary order against the company in December 2010[10] for failing to protect vulnerable customers.[11] [12]

In 2014, the company received criticism for the tone of its energy saving advice. When it was reported that shadow Energy Minister Tom Greatrex had said the advice was an "insult" to millions of people, the company's reported response was that "These tips are meant to provide some advice on how we might reduce our energy usage and absolutely not intended to trivialise the issue of fuel poverty, something we take very seriously."[13]

In January 2014, the company signed a three-year deal to become title sponsors of the Super League.[14]

In September 2014, the firm announced it was considering an initial public offering or outside investment to fund foreign expansion.[15]

In September 2015, the company announced an expansion into Germany, to be branded as Shell.[16] In the same month, Reuters reported that First Utility had doubled customer numbers in three of the last four years, adding 275,000 customers in the year to July 2015.[17]

Shell reached an agreement to buy the company in December 2017,[18] and the deal was completed on 28 February 2018.[19] In March 2019, the company was rebranded from First Utility to Shell Energy,[20] and it was stated that all customers would be supplied with electricity from 100% renewable sources.[21] [22]

First Utility had also offered an Internet access service, bundled with line rental and phone calls, and this was continued under the Shell Energy brand.[23]

Acquisitions

In October 2019, Shell Energy agreed to the £10.5m purchase of the customers of Green Star Energy, a brand of Canada's Just Energy. Green Star had around 200,000 residential gas and electricity customers.[24]

In February 2021, Shell Energy took over the broadband and phone customers of Post Office Ltd.[25]

In September 2021, Ofgem chose Shell Energy to take on the 255,000 customers of failed supplier Green Supplier Limited.[26] The following month, Ofgem chose Shell Energy to take on the 15,000 Colorado Energy, 235,000 Pure Planet and 9,000 Daligas customers after those suppliers ceased trading.[27]

Sale to Octopus Energy

In September 2023, it was reported that Octopus Energy would acquire Shell's household energy business in the UK and in Germany, in a deal expected to complete in late 2023. Octopus would take over providing energy for 1.4 million homes as well as broadband services for 500,000 customers.[28] In December 2023, it was reported that TalkTalk would acquire the broadband customers.[29]

Finances

In 2020 the company had revenue of £856 million, gross profit of £84 million and a net operating loss of £84 million.[30]

Notes and References

  1. News: Hurst . Laura . 18 October 2021 . Shell Energy Customer Base Grows as U.K. Power Suppliers Go Bust . . 5 October 2023.
  2. News: Gosden . Emily . 9 December 2013 . First Utility eyes lower bills with Shell energy deal . . 5 October 2023.
  3. News: Cave . Andrew . 19 October 2013 . First utility boss: bills could double in the next 10 years . The Daily Telegraph . 5 October 2023.
  4. Web site: Fast Track 100 - First Utility . Fast Track . https://web.archive.org/web/20160310215848/http://fasttrack.co.uk/fasttrack/leagues/dbdetails.asp?compid=3284&siteid=1&yr=2011 . 10 March 2016.
  5. News: . 13 February 2012 . Energy minnow seeks big name . The Independent . 5 October 2023.
  6. Web site: 6 June 2013 . First Utility appoints Siemens to deliver nationwide consumer Smart Meter programme . PR web . https://web.archive.org/web/20220311055405/https://www.prweb.com/releases/first-utility/siemens/prweb10808065.htm . 11 March 2022.
  7. Web site: First:utility makes Smart Meters available for free . 29 January 2009 . Energylinx . https://web.archive.org/web/20171010010149/http://news.energylinx.co.uk/2009/01/firstutility-makes-smart-meters-availabl.html . 10 October 2017.
  8. News: Bradbury . Danny . 2010-05-18 . First:utility warns of smart meter pitfalls and tightening targets . BusinessGreen . limited . 5 October 2023.
  9. News: Taylor . Ann Elise . 6 July 2011 . First Utility to lower energy bills with smart grid software . GreenwiseBusiness . https://archive.today/20140930222607/http://www.greenwisebusiness.co.uk/news/first-utility-to-lower-energy-bills-with-smart-grid-software--2458.aspx . 30 September 2014.
  10. Web site: Provisional Order under Section 25(2) of the Electricity Act 1989 and Section 28(2) of the Gas Act 1986 . . 5 October 2023.
  11. News: Mason . Rowena . 9 January 2011 . First Utility 'failing to protect vulnerable' . The Daily Telegraph . 5 October 2023.
  12. News: 10 January 2011 . First Utility's vulnerable customer policy is 'not fit for purpose' . . 5 October 2023.
  13. News: Tobin . Lucy . 3 January 2014 . Energy firm First Utility suggests clients give up tea and shower with other people to cut costs . The Independent . 5 October 2023.
  14. News: . 21 January 2014 . Super League agrees new three-year sponsorship deal . BBC Sport.
  15. News: Schaps . Karolin . 8 September 2014 . UK's First Utility eyes IPO to fund expansion . Reuters . 5 October 2023.
  16. News: Gosden . Emily . 30 September 2015 . First Utility launches in Germany - branded as Shell . The Daily Telegraph . 5 October 2023.
  17. Web site: Schaps . Karolin . 23 September 2015 . UK's small energy suppliers gain market share from 'big six' . Reuters UK . 5 October 2023.
  18. News: Vaughan . Adam . 21 December 2017 . Shell to supply energy to UK households after takeover of First Utility . The Guardian . 5 October 2023.
  19. . 28 February 2018 . Shell completes acquisition of First Utility . . 5 . live . 5 October 2023 . https://web.archive.org/web/20231005145949/https://www.shell.co.uk/about-us/news-and-publications/media-releases/_jcr_content/root/main/section_1223829208/call_to_action/links/item0.stream/1692688072265/254bcbb49b1502562ea70491c751c1be2a29e271/2018-shell-uk-media-releases.pdf . 5 October 2023.
  20. Web site: SHELL ENERGY RETAIL LIMITED . 5 October 2023 . Companies House.
  21. News: Bailey . Jo . 27 March 2019 . First Utility becomes Shell Energy and goes 100% green . Choose . 5 October 2023 . live . https://archive.today/20231005151356/https://www.choose.co.uk/news/2019/first-utility-rebrands-shell-energy/ . 5 October 2023.
  22. News: Chapman . Ben . 25 March 2019 . Shell Energy is offering 700,000 UK homes 100% renewable electricity for first time ever . 5 October 2023 . The Independent.
  23. Web site: Shell Energy Broadband Deals . n.d. . Cable.co.uk . live . 5 October 2023 . https://web.archive.org/web/20230911151916/https://www.cable.co.uk/broadband/providers/shell-energy-broadband/ . 11 September 2023.
  24. News: Stoker . Liam . 9 October 2019 . Shell Energy lands £10.5 million Green Star Energy acquisition deal . Current . live . 5 October 2023 . https://web.archive.org/web/20230911153434/https://www.current-news.co.uk/shell-energy-lands-10-5-million-green-star-energy-acquisition-deal/ . 11 September 2023.
  25. News: Jackson . Mark . 1 February 2021 . Shell Signs Deal to Gobble Post Office's UK Broadband Division . ISPreview UK . live . https://web.archive.org/web/20210815024140/https://www.ispreview.co.uk/index.php/2021/02/shell-signs-deal-to-gobble-post-offices-uk-broadband-division.html . 15 August 2021 . 5 October 2023.
  26. News: Lempriere . Molly . 28 September 2021 . Shell Energy takes on failed supplier Green's customers . Current . live . 5 October 2023 . https://web.archive.org/web/20230911151915/https://www.current-news.co.uk/shell-energy-takes-on-failed-supplier-greens-customers/ . 11 September 2023.
  27. News: Mann . Jyoti . 18 October 2021 . Latest UK energy supplier succumbs to gas market storm . Financial Times . limited . live . 5 October 2023 . https://archive.today/20211018172701/https://www.ft.com/content/fc808f8e-be01-4e03-b142-de53aa07c2c1 . 18 October 2021.
  28. News: . 1 September 2023 . Octopus to buy Shell's household energy firm . BBC News . 5 October 2023.
  29. Web site: Kleinman . Mark . 14 December 2023 . TalkTalk gets arms around Shell broadband base in deal with Octopus . 2023-12-16 . Sky News . en.
  30. Web site: SHELL ENERGY RETAIL LIMITED . n.d. . Companies House.

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