Water Retail Market - a different perspective.
Phill Mills
Water sector specialist | Adviser and analyst of industry trends, policy developments, opportunities
Here’s a different way of looking at the water retail market – the number of retail players its attracted and when.
For ‘when’ I’m using the date Ofwat granted their Water Supply and/or Sewerage License (WSSL).
The early players, with licenses granted in 2016, were those set up by the current incumbents, plus some of the experienced Scottish retailers. Most of the new entrants were licensed in the couple of months before market opening, i.e. February and March this year. But we also saw the first self-supply license awarded then. Since market opening it’s been a lot quieter with only 5 new entrants. Interestingly though we’ve seen a further 2 applicants granted self-supply licenses.
There are more players in the pipeline for 2018. I’m aware of another 4 including a further self-supply application from a global beverage brand. You'll see their big red truck around at Christmas.
Of the national retail players there are 5 who have no supply point served, i.e. no customer, though this includes Thames Water who transferred all their non-household customers to Castle Water. Of the regional retailers there are 3 who have no supply point served, though this does include Severn Trent Water, whose customers are listed under Water Plus, the JV between Severn Trent and United Utilities and the largest retailer, supply point wise.
Be interesting to see how the water retail market develops in 2018, not just in the customer switching numbers, but also from the number of new retailers entering or even existing the market. Watch this space….
Refs
WSSL information from Ofwat website
https://www.ofwat.gov.uk/regulated-companies/ofwat-industry-overview/licences/#wssl
Supply point information from MOSL Market Charts as at 30 November
https://www.ofwat.gov.uk/regulated-companies/ofwat-industry-overview/licences/#wssl
CEO at Waterscan Limited
7 年Interesting piece Phill Mills . More self supply coming in the new year but more interesting is new entrants from outside the industry bringing new ideas and operating models.
Chief Operating Officer|Operations Director|Executive and Board Member|Customer Experience|Transformation
7 年Hi Phil. Very interesting, it’s been great to see the new entrants emerge, it’s keeps us on our toes and keen to be even better. not sure credit terms are barrier to entry as Scotland has a full pre pay approach and there have been some successful new entrants over the years.
The Water Retail Company - Co-Founder & CTO
7 年This is interesting Phil, as a new entrant retailer I would say that the impact of the Credit Support requirements and the VAT rules (both arranged predominantly by the wholesalers before market opening) means that it is not easy for anyone wishing to enter the market or expand rapidly if they don't have a parent company guarantee. There are some wholesalers like Thames who are coming up with innovative solutions to help this situation but unless its resolved we will see a market dominated by incumbents and Scottish retailers who made their money on the higher Scottish margins and can use that as a base to expand in the English market.
Retired. Doing interesting + worthwhile stuff as p/t Net Carbon Zero Senior PM in the CoE. Also p/t PhD student at University of Manchester - plumbosolvency/phosphate disengagement focus. Trustee at multiple charities.
7 年It will also be interesting to see the accounts of the retailers to see which are making money, which are treading water and which are leaking cash (puns intended).
Chief Executive at REPIC Ltd
7 年Interesting analysis Phil. Thanks for sharing.