• 1 minute read
  • Sep 29, 2021

How to succeed in a deregulated energy and utilities market

For energy and utility providers in regulated markets, stories of businesses that underwent liberalization serve as a crystal ball to help them make the right choices when deregulation comes for their region.

The ongoing energy crisis impacting the UK - one of the most deregulated markets in the world - has taken some major scalps including Avro Energy, Green Supplier Limited, Utility Point and People’s Energy, and led to a spate of panic buying leaving up to 90% of fuel stations in major cities dry.

This fiasco has a number of causes, including general post-pandemic supply disruptions, Russia capping natural gas distribution to Europe (leaving storage sites just 72% filled - the lowest at this time of year in over a decade), and the imminent colder months kicking off the so-called “heating season”.

Whatever the eventual solution for the UK, we are witnessing in real time the kind of turmoil that can occur in a deregulated system.

We recently went in depth into the various impacts of energy deregulation around the world, looking specifically at Sweden, Japan and the United States. Three separate countries, with three divergent market eco-systems, which liberalized for different reasons, and at different times.

But between them, we learned important lessons about how to weather the storm of deregulation, and what the successful players have in common. Among those lessons:

  • Focussing on value for money over volume
  • Anticipating a wave of energetic new challengers
  • Fully appreciating the importance of customer data

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