Shell seeking buyers for retail energy business
Shell is withdrawing from the domestic electricity and gas market, blaming poor returns and government inconsistency towards the industry.
Just five years after entering the market, the energy giant said it is putting its home retail business up for sale. Ovo and Octopus have been identified as potential buyers.
Shell Energy Retail has 1.34 million household customers, or more than 4% of the market. It also has 500,000 household broadband subscribers, a legacy of its 2021 acquisition of a business set up by the Post Office. The business has a headcount of about 2,000.
The company launched a review of its European retail businesses in January shortly after CEO Wael Sawan took office.
A spokesman said it is quitting domestic supply because of “market conditions” – largely attributed to the Russia-Ukraine conflict — and because the UK is in “need of a stable fiscal regime and policy framework”.
Shell fully entered the domestic energy supply market in 2018 when it took over First Utility, which launched ten years earlier as another potential disruptor.
The disposal will include Shell’s household supply businesses in the Netherlands and Germany.
“A sales process is already under way with the intent to reach an agreement with a potential buyer in the coming months,” Shell said in a statement.
“Nothing will change for our customers during the sales process. We are committed … to ensuring a seamless transfer to a buyer capable of delivering on its obligations, including our intent to maximise employment.”
The disposal does not include Shell’s supply operations to businesses and small company customers.
Richard Neudegg, director of regulation at Uswitch, said: “Shell’s decision to exit the market is disappointing, as it has been a well-backed challenger to the larger energy suppliers.
“It is important that there’s a level of competition between firms in the longer term, so suppliers cannot rest on their laurels when it comes to service quality and price.”