Shell has announced the sale of its energy and broadband arms, alongside its exit from the retail energy business. The news comes amid concerns that rumours of the end of the energy crisis have been greatly exaggerated.
Shell has outlasted many domestic energy suppliers during the current energy crisis, with 29 closing in 2021 alone. The fact that such a large energy provider is choosing to exit the market now is a concerning one. At a time when many suppliers are beginning to float new fixed-rate tariffs, Shell is taking the opposite path. Will this sale herald another string of energy firm closures, or will Shell be the final casualty of the energy crisis?
Shell Energy was originally launched as First Utility in 2008, with Shell plc acquiring the company and rebranding between 2018 and 2019. The decision to sell the energy supply arm of the business comes at the end of a five-month review process, covering Shell’s retail energy operations in the UK, the Netherlands and Germany. All three of these energy supply divisions are now in the process of being sold.
Shell currently provides electricity and gas to over 1.4 million customers in the UK, and there is already reported interest in the purchase from OVO and Octopus Energy. Octopus Energy completed its acquisition of closed energy supplier Bulb’s 1.5 million customers this January.
Shell also currently provides broadband to around 500,000 UK customers under its Shell energy brand. The provider uses Openreach’s network infrastructure, and initially took over the existing broadband and phone supply network of the Post Office in 2021.
This broadband division is also currently for sale, although it’s not yet known whether this will be bought by another energy provider or an existing broadband company.
What does the Shell Energy sale mean for customers?
If you’re an existing Shell energy or broadband customer – don’t panic. Nothing will change immediately, and you should continue paying your bills as normal.
You’ll be updated when the sale is complete, and given details of who you’re new supplier will be. If you’re on a fixed rate tariff for energy, your current unit prices will be honoured by your new supplier.
When the switchover occurs, you shouldn’t experience any disruption to your power supply. Broadband customers shouldn’t lose service for more than one working day and will be entitled to compensation if there are any problems.
Are more energy providers closing?
Currently, there is no news of any other UK energy suppliers being offered for sale. While the news of such a large supplier exiting the industry will certainly leave other providers feeling wary, it’s almost certain we won’t see a string of closures like in 2021 again.
A more positive indicator for the state of the industry is the reported interest in purchasing Shell Energy. While Bulb Energy took more than a year to sell, Shell stated on Tuesday that they plan “to reach an agreement with a potential buyer in the coming months.”
For now, we can only wait to see if the sale does go ahead as planned, and which energy supplier adds Shell’s 1.4 million customers to their network.
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