The Future of Energy Retail in the UK

Content

• Chapter 1 Executive Summary
• Chapter 2 Introduction
  • A survey of 41 utility executives and industry analysts was used to outline three visions of the development of the UK residential retail market
• Chapter 3 Methodology
  • A robust rating and ranking process was used to apportion 40 future events into three scenarios
  • The aggregated responses were placed into a matrix and apportioned into one of 5 groups
  • The total set of respondents put 29 of the questions into Groups A or B, 5 into Group C and 6 into Groups D and E
  • Ranking responses according to likelihood allows some to be moved from one group to another or dropped altogether
  • In order to construct the analysts' scenario, Datamonitor selected the 15 Group A and B responses over which there was most disagreement between analysts and utility executives
  • There are 14 Group A responses, which largely make up the consensus scenario (and some in the analysts' scenario)
  • There are 15 Group B responses, which make up the competition scenario (and some in the analysts' scenario)
  • There are 11 responses in Groups C, D and E - Group C goes into the competition and consensus scenarios
  • Ten metrics were included in the survey, and can be allocated to the consensus or competition scenarios
  • Metrics for the analysts' scenario are taken from the mean of the analysts responses
• Chapter 4 Scenarios
  • The consensus scenario allows higher profitability and new entrant activity
  • Public discontent leads to government intervention in the energy industry, utilities adopt cautious strategies and switching remains subdued. The industry remains focused on core energy products, and higher profit margins attract new entrants
  • Both electricity and gas prices will rise because of rising wholesale costs, and margins rise
  • The competition scenario focuses competition on multi-product bundles and ends with the exit of a major supplier
  • The search for profit leads to a new scramble for scale, both through a price war and product development. Competition is focused on the development of multi-utility services, and is intense enough for a utility to exit the market
  • Electricity and gas prices will rise with wholesale costs but switching becomes more intense
  • The managed market scenario leads towards stasis in the retail market, forcing the merger of two major suppliers
  • The need to achieve environmental goals leads to a government managed energy industry. Retail competition is subdued in core energy businesses, ultimately culminating in the merger of two major utilities
  • Electricity wholesale prices fall but margins hold in electricity and gas
  • The three scenarios identified cover a selected portion of all possible outcomes
• Chapter 5 Appendix
  • The consensus scenario was constructed from 14 events, principally group A but including 5 from groups B and C
  • The competition scenario was constructed from 15 responses, principally group B, but including 6 from groups A and C
  • 13 of the responses over which there was most disagreement were selected for the analysts' scenario itself
  • The means of the raw data
  • Research methodology
  • Future readings
  • SPP writing team
  • How to contact experts in your industry
• List Of Figures
  • Figure 1: The events matrix
  • Figure 2: The events matrix - all responses
  • Figure 3: Likelihood rankings of for Group A and B responses
  • Figure 4: The events matrix - analysts scenario
  • Figure 5: Ten metrics were included in the survey - the mean responses are used in the consensus scenario, the more aggressive of the first and third quartiles is used in the competition scenario
  • Figure 6: Ten metrics were included in the survey, the mean of the analysts' responses are used in the analysts' scenario
  • Figure 7: Consensus scenario timeline
  • Figure 8: Consensus scenario metrics
  • Figure 9: Consensus scenario cost breakdown per customer
  • Figure 10: Competition scenario timeline
  • Figure 11: Competition scenario metrics
  • Figure 12: Competition scenario cost breakdown per customer
  • Figure 13: Managed market scenario timeline
  • Figure 14: Managed market scenario metrics
  • Figure 15: Consensus scenario cost breakdown per customer
  • Figure 16: The three scenarios identified cover a selected portion of all possible outcomes
  • Figure 17: Means of the raw data
  • Figure 18: Q1 impact and likelihood rating
  • Figure 19: Q1 distribution of responses and average score
  • Figure 20: Q2 impact and likelihood rating
  • Figure 21: Q2 distribution of responses and average score
  • Figure 22: Q3 impact and likelihood rating
  • Figure 23: Q3 distribution of responses and average score
  • Figure 24: Q4 impact and likelihood rating
  • Figure 25: Q4 distribution of responses and average score
  • Figure 26: Q5 impact and likelihood rating
  • Figure 27: Q5 distribution of responses and average score
  • Figure 28: Q6 impact and likelihood rating
  • Figure 29: Q6 distribution of responses and average score
  • Figure 30: Q7 impact and likelihood rating
  • Figure 31: Q7 distribution of responses and average score
  • Figure 32: Q8 impact and likelihood rating
  • Figure 33: Q8 distribution of responses and average score
  • Figure 34: Q9 impact and likelihood rating
  • Figure 35: Q9 distribution of responses and average score
  • Figure 36: Q10 impact and likelihood rating
  • Figure 37: Q10 distribution of responses and average score
  • Figure 38: Q11 impact and likelihood rating
  • Figure 39: Q11 distribution of responses and average score
  • Figure 40: Q12 impact and likelihood rating
  • Figure 41: Q12 distribution of responses and average score
  • Figure 42: Q13 impact and likelihood rating
  • Figure 43: Q13 distribution of responses and average score
  • Figure 44: Q14 impact and likelihood rating
  • Figure 45: Q14 distribution of responses and average score
  • Figure 46: Q15 impact and likelihood rating
  • Figure 47: Q15 distribution of responses and average score
  • Figure 48: Q16 impact and likelihood rating
  • Figure 49: Q16 distribution of responses and average score
  • Figure 50: Q17 impact and likelihood rating
  • Figure 51: Q17 distribution of responses and average score
  • Figure 52: Q18 impact and likelihood rating
  • Figure 53: Q18 distribution of responses and average score
  • Figure 54: Q19 impact and likelihood rating
  • Figure 55: Q19 distribution of responses and average score
  • Figure 56: Q20 impact and likelihood rating
  • Figure 57: Q20 distribution of responses and average score
  • Figure 58: Q21 impact and likelihood rating
  • Figure 59: Q21 distribution of responses and average score
  • Figure 60: Q22 impact and likelihood rating
  • Figure 61: Q22 distribution of responses and average score
  • Figure 62: Q23 impact and likelihood rating
  • Figure 63: Q23 distribution of responses and average score
  • Figure 64: Q24 impact and likelihood rating
  • Figure 65: Q24 distribution of responses and average score
  • Figure 66: Q25 impact and likelihood rating
  • Figure 67: Q25 distribution of responses and average score
  • Figure 68: Q26 impact and likelihood rating
  • Figure 69: Q26 distribution of responses and average score
  • Figure 70: Q27 impact and likelihood rating
  • Figure 71: Q27 distribution of responses and average score
  • Figure 72: Q28 impact and likelihood rating
  • Figure 73: Q28 distribution of responses and average score
  • Figure 74: Q29 impact and likelihood rating
  • Figure 75: Q29 distribution of responses and average score
  • Figure 76: Q30 impact and likelihood rating
  • Figure 77: Q30 distribution of responses and average score
  • Figure 78: Q31 impact and likelihood rating
  • Figure 79: Q31 distribution of responses and average score
  • Figure 80: Q32 impact and likelihood rating
  • Figure 81: Q32 distribution of responses and average score
  • Figure 82: Q33 impact and likelihood rating
  • Figure 83: Q33 distribution of responses and average score
  • Figure 82: Q34 impact and likelihood rating
  • Figure 83: Q34 distribution of responses and average score
  • Figure 84: Q35 impact and likelihood rating
  • Figure 85: Q35 distribution of responses and average score
  • Figure 86: Q36 impact and likelihood rating
  • Figure 87: Q36 distribution of responses and average score
  • Figure 88: Q37 impact and likelihood rating
  • Figure 89: Q37 distribution of responses and average score
  • Figure 90: Q38 impact and likelihood rating
  • Figure 91: Q38 distribution of responses and average score
  • Figure 92: Q39 impact and likelihood rating
  • Figure 93: Q39 distribution of responses and average score
  • Figure 94: Q40 impact and likelihood rating
  • Figure 95: Q40 distribution of responses and average score