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Energy debt hits record £3.8bn, as Ofgem propose initiatives to raise standards
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Closing the gap between complaint volumes and service ratings to save £m’s
There's generally little correlation between customer service ratings and complaint volumes for energy suppliers. A good Trustpilot score doesn't typically mean less complaints, but as we show here, suppliers can save £m's by closing this gap.
Typical DD customers are ~1.7x monthly payments in credit
As we head into winter, typical Direct Debit (DD) customers are in credit by ~1.7x their monthly payment. With c.70% domestic energy customers choosing to pay by DD, payment adequacy is critical for supplier health.
Domestic energy suppliers faced £1.6 billon cash coverage deficit in June 2024
By combining Ofgem's latest data on customer credit with their recent market debt figures, BFY Group analysis shows domestic suppliers faced a £1.6bn shortfall to the target cash reserve in June 2024 - an increase of £1.4bn from 12 months before.
Domestic Energy Debt Reaches Record £3.7 Billion
Energy debt hits a new peak of £3.7 billion as of Q2 2024 as Average debt per customer rises to a record £1,094. Energy debt has continued to increase by 40% since Q2 2023 while average annualised customer bills have levelled out.
Getting operationally ready for change in a dynamic energy market
Avoiding expensive delays is key in any change programme, and the risks are getting greater with smart targets and MHHS on the horizon. Often, suppliers have the right idea on what to change, but fall short in realising benefits due to how the change is delivered. Here, we show why operational readiness is key to nailing this delivery, with five focus areas to sharpen your approach.
Quantifying the investment needed for cheaper bills under GB Energy
GB Energy's ambition to reduce bills and make Britain a 'clean energy superpower' is welcome news. But substantial private investment will be needed, if the potential savings pledged by Labour are to be realised. Using a very high-level business case, we've quantified the scale of investment that may be required.
Capitalising on new M&A opportunities with renewable energy
With Labour leading the drive towards clean energy, we're expecting to see an uplift in M&A activity related to renewables throughout the rest of 2024. Profits, economies of scale, and enhanced customer engagement are on offer to those who capitalise on the opportunities.
Price Cap rising to £1,717 in Oct-24, savings available to those who fix now
Ofgem have today (23 Aug) announced a 10% increase (£149) in the headline Price Cap, which will rise to £1,717 for a typical Direct Debit (DD) customer from October. It’s the highest level since Q1-24, and follows two consecutive falls.
Differentiating the customer journey in energy’s era of ‘similar servicing’
Market share gain and great customer service are becoming increasingly linked in Energy. But as suppliers invest in new operating systems, with many opting for the same or similar providers, how will suppliers differentiate their servicing offering to create a competitive advantage?
MHHS could pose a major commercial risk for suppliers
Market-wide Half Hourly Settlement (MHHS) has the potential to pose a major commercial risk for suppliers, with a risk of overpaying for energy purchases by up to 8%.
Is your operation ready for increased customer switching?
Change of supply - it's been a while. As wholesale energy prices remain high but stable, suppliers should be making sure they're operationally prepared for a material increase in switching, which we're expecting to see from the announcement of the October Price Cap onwards.
Price Cap to increase 10% in Oct-24, but annual bills stay flat
Ofgem's headline Price Cap is set to increase 10% this Winter (~£140 rise from October-24), but demand-weighted annual bills are expected to remain flat. Based on our projections, customers' annual bills should be ~£1,700 from 01 October, staying unchanged since April-24
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