Utilities giant British Gas has come out on top in a new study on the performance of UK energy suppliers to the commercial market.
The Business Energy Supplier Index is the first publication to rank business energy suppliers in the UK. It aims to benchmark business energy supplier performance against others in the market, challenging the most established companies and some significant new market entrants on their scale, financial stability, green energy and customer service credentials.
For the first time, businesses judged which energy suppliers are the most financially stable, which suppliers have the most customers, and which suppliers score highest on customer service, all in one place.
The index helps business customers to use the data to reduce the cost of their energy bills, with current estimates indicating that firms are overpaying for their energy by between £500 million and £1.7 billion each year – often because they fail to shop around.
The inaugural 2020 index shows that British Gas achieved the highest overall score of 3.7 (out of five), with solid scores across all metrics. SSE Group and ENGIE are in joint second in the table having scored an overall ranking of 3.1, with the latter scoring highly on financial stability and customer service.
The highest-placed small supplier on the list is Hudson Energy, which offers 100% renewable energy and scored top marks in the sustainability metric.
At the bottom of the table, long-established business energy specialist Corona Energy recorded a poor customer service rating and a lower sustainability score than other small energy suppliers in the index, with renewables making up less than 25% of its portfolio.
Meanwhile, Ørsted (formerly known as Dong Energy), which exited the oil and gas industry to focus on renewables, scored top marks for sustainability but languishes near the bottom of the table due to average or below-average scores in other metrics.
Andrew Richardson, the CEO of Troo, said: “Old faithful British Gas takes the top spot in our inaugural index, due mainly to good customer service and a large, loyal customer base. Notwithstanding Centrica’s financial challenges, they must be doing something right.
“SSE Group is in an interesting position, having recently completed the sale of its domestic energy business (its retail division) to OVO Energy. It continues to supply more than 500,000 business customers which for the time being appear to remain its core business, but with the SSE plc website highlighting the company’s work in power generation over its business supply operation, will they remain so for much longer?
“Like SSE, Engie announced the sale of its domestic customer division to Octopus Energy to focus on its business customers. Engie was a solid performer across most index metrics but delivered a truly eye-catching customer service score – the only supplier in the index to do so.
“Of the new market entrants, Hudson Energy achieved a notable sustainability score and could disrupt the established suppliers further in 2021 by improving its customer service performance.”
“Our index is the first comprehensive review of the UK business energy market. It uses robust methodology to help businesses and other interested parties understand how business energy suppliers perform across several key metrics so they can make truly informed choices about their business energy.
“It’s clear that British businesses are spending far too much on energy every year. This is down to several reasons, including suppliers raising prices above competitive levels, the use of unregulated energy brokers and companies’ inertia which has resulted in them not switching to a cheaper supplier.
“The data in our inaugural index and subsequent Troo indices may encourage more businesses to shop around for better deals and foster greater competition in the commercial environment. It may also help to bring this market more in line with the domestic energy sector, where switching suppliers is becoming increasingly common.”
Tim Hipperson, an independent energy analyst of Hipperson Consulting, said: “Ofgem is about to introduce its Retail Energy Code (REC) to make it easier and quicker for businesses to switch supplier. With new market entrants coming in with disruptive models and technology, strong customer service credentials and compelling green energy offerings, there is more pressure on established players to invest in renewables and technology to compete.”
Read more about the index.