Just over a year ago, Royal Dutch Shell acquired British household energy supplier, First Utility. Shell announced today that it has now rebranded the company, and it’s now called Shell Energy.
The newly minted company is switching all 710,000 of its customers to 100 percent renewable energy as Shell seeks to expand on its low-carbon business.
Shell Energy told World Oil it has a fixed rate power-supply tariff for UK customers of about 970 pounds ($1,278) a year, or about 81 pounds a month until July 2020. UK power regulator Ofgem says Shell Energy’s rate undercuts Bulb Energy, which had a deal for 981 pounds a year, and is around 18 percent cheaper than power supplied by Centrica-owned British Gas.
Shell Energy is in good company, though. It joins Bulb Energy and Octopus Energy – who also offer all customers 100 percent renewable electricity. Shell is also offering its customers a 3 percent discount on fuel at its many gas stations and plans on offering discounts for electric vehicle charging.
Global warming is a serious concern for Shell
Shell is planning on becoming the world’s largest power company within 15 years and to that end, it plans on spending as much as $2 billion a year on its new-energies division. This move suggests that Shell is taking global warming seriously.
“Shell has been increasingly vociferous about its ambitions in electricity markets, and we see it as a significant competitive/disruptive force over the coming years for traditional utility energy suppliers/retailers,” RBC Capital Markets said in a note Monday.
Mark Gainsborough, executive vice president at Shell New Energies, said the rebrand was part of the company’s wider cleantech strategy. “This is a good example of our approach to building a significant electricity business, in line with customer needs,” he said, reports Business Green.
Britain’s household energy price cap
Britain’s energy market is dominated by the “Big Six,” Centrica’s British Gas, Iberdrola’s Scottish Power, E.ON, EDF Energy, SSE, and Innogy’s npower. And believe it or not, but none of the “big six” offer 100 percent renewable energy as standard to their customers.
This means that Shell’s move is going to put more pressure on these major power companies which have already been experiencing a massive loss of customers leaving them for smaller, cheaper suppliers. Another problem facing power companies is the surge in wholesale prices for power and gas’
Quite a number of companies have gone out of business over the rise in wholesale prices. Brilliant Energy, which has about 17,000 domestic customers, became the 10th firm to cease trading in the past 12 months on March 11. British Gas lost 742,000 customers last year
“We are building on the disruptive nature of First Utility to give customers something better,” said Colin Crooks, chief executive officer of Shell Energy Retail. “We know that renewable electricity is important to them and we are delivering that, while ensuring good value and rewarding loyalty.”