The ranks of the 40-plus energy companies jostling for householders’ business will swell on Monday with the launch of a new supplier that delivers electricity from windfarms.
Fischer Energy hopes to sign up 40,000 customers in the first year to its single variable tariff, with renewable power bought from Denmark’s Dong Energy.
The new entrant arrives less than two months after the collapse of another small supplier, GB Energy UK. Experts have raised concerns that the retail energy market is approaching saturation point and question the wisdom of consumers signing up for a variable tariff at a time of rising wholesale prices.
Keith Bastian, Fischer’s chief executive, said he had been motivated to start the company because of the inequality of multiple tariffs, and that offering a single tariff would reduce confusion.
“That will in effect put the customer first,” he said. “They can buy the energy knowing it’ll be a fair price. It won’t be the cheapest, we can’t guarantee that, but it will be fair.”
The supplier, a family-owned business based in Leicester, would not risk GB Energy’s fate by “going down the road of a race to the bottom” on price, Bastian said. He added that while the company would be on comparison sites, it would not pay commissions to them.
The company, which has around 25 employees, is also going up against some long-standing green energy suppliers such as Good Energy and Ecotricity with its pledge to supply 100% renewable electricity. “Green energy is the only way forward. Burning carbon fuels is not the solution,” Bastian said.
It is not yet clear whether Fischer will stand out against the Big Six and a crowded landscape of smaller players.
“They’ve talked about it being a unique offering with one tariff that’s fair for all. Well there are a number of suppliers doing that. You take Bulb, they have one tariff and renewable electricity,” said Stephen Murray, an energy expert at Moneysupermarket.
He said the comparison site had noticed that since GB Energy’s demise, customers were erring towards more established players such as British Gas, EDF, npower, E.ON, ScottishPower and SSE.
Ofgem says there are currently 44 active suppliers in the retail market. “I think we’re getting there [near saturation point]. If a supplier comes with a unique and innovative approach then great, but I’m not sure what that approach is at the moment,” Murray said.
Joe Malinowski, the founder of The Energy Shop comparison site, said: “I think the market is way over-saturated with new entrants. It doesn’t need another one, and what they’re doing is not unique.”
He also echoed Murray’s concern about single variable tariff: “The problem with having a variable tariff in a volatile market is you have to keep raising the price.”
Fischer is due to publish details of its tariff on Monday, when an Edinburgh couple also launch a crowdfunding effort to raise £450,000 to set up a new energy supplier later this year that would offer greater transparency. David Pike and Karin Sode say Our Energy will share its salaries and accounts with customers.
