05 Dec Worried about energy industry disruption – don’t be!
The last few weeks have given those of us working in the energy sector barely time to draw breath. It seems that not a day goes by without another piece of news telling us that a supplier is unable to meet their obligations, or even is going out of business. And it’s not likely to calm down soon – wholesale energy prices are continuing to stay high for the upcoming winter, and Ofgem looks determined to crack down on companies who don’t pay their bills, or delivers poor customer service. We can only brace ourselves for what the next few weeks may bring!
All this volatility can be deeply unsettling for those who are reliant on the energy sector for their monthly pay cheque. But, as someone who has been in the energy sector for a good few years, I can confidently say that we are just going through a period of ‘re-balancing’. I talked about this in my blog at the beginning of 2018 – that the flurry of new entrants entering the market couldn’t continue at the same pace. And I think this is the beginning of stage two – a rationalisation and resettlement of the retail market. This period of higher wholesale prices and closer regulatory scrutiny will act as a ‘shake out’ – those businesses without the right business models, or software and technology or that are simply unprofitable will fall out of the market, either via acquisition or liquidation.
Whilst that might seem quite alarming, and there is much talk of an ineffective market, rates of failure for utilities businesses are actually a lot lower than in the wider business community. There’s an often quoted figure of around 50% of start-ups failing within 3 years – you won’t see anything like that failure rate in this market. Energy retail start-ups are typically relatively well capitalised, are mostly started by people who have a degree of experience in the sector, and are usually supported by well-regarded technology partners.
So if you are sitting within an energy supplier, and worried about what recent instability might mean for you – don’t be! Whilst there will be some natural attrition during this period, people with good experience and the right skill set will always be in demand across the sector. Here at Utility People we’ve been talking to many of those affected by the announcements last week, and we have many jobs available across the UK energy sector. If you’ve been directly impacted – please do get in touch, and we’ll do our best to help.