Today the sale of Robin Hood Energy’s customers to British Gas was announced by Nottingham City Council. The sale comes as a result of the strategic review of Robin Hood Energy which began in March 2020. Councillor David Mellen, Leader of the Council commented: “The energy market has changed considerably over the last few years. At its peak there have been over 70 energy suppliers competing to win new customers and the introduction of price caps has fundamentally changed the landscape with many smaller suppliers exiting.”
With increasing competition from smaller independent suppliers over recent years, Local Authorities had an opportunity to step into the energy supply space. This was to be predominantly targeted at household and small business energy users, and the not-for-profit community energy supply model was seen as a challenge to the profiteering of the Big 6 and, to a lesser extent, the new market entrants. However with the introduction of price caps for standard variable tariffs aimed at those households who had never changed suppliers and the challenges in setting competitive tariffs against the background of volatile wholesale prices it seems the aim, while worthy, has not delivered. Securing customers even in your own back yard is an expensive business, along with servicing them in a regulated market better suited to “experts”.
With Bristol Energy already up for sale and many other community energy schemes centered around local authorities not even making it to the launch-pad, this latest failure (however it might be dressed up) will be chorused by the “I told you so’s” of the established suppliers. The present low prices in the wholesale markets, brought about by the impact of the pandemic, will support the new entrants for a while to come but once prices recover then maybe we will see small supplier failure return as a feature of a fragmented market, and one which will have barriers to entry to new independent and community based suppliers.