The Importance of Competition

Never underestimate the importance of competition. Stephen Fitzpatrick certainly doesn’t.

Don’t know him? You’d be forgiven for being unaware. Since this time last week, few others had him on their radar either.

Although on Tuesday 29th October, when he walked out in front of a UK parliamentary select committee that started to change.

The Managing Director of Ovo Energy had been called to participate in a public hearing and debate following above inflation energy price increases in the UK.

The discussion, which split the six major energy firms operating in the country into two panels, also included the boss of a smaller energy firm amongst each.

For Stephen, that meant walking out and taking his seat alongside Tony Cocker, Chief Executive, E.ON, William Morris, Managing Director, SSE and Guy Johnson, External Affairs Director, RWEnpower.

It also meant that Ovo Energy was viewing the public committee more as a marketing and public relations exercise, as opposed to the somewhat more sombre affair that the three heavyweights sitting alongside him were ready for.

And that’s where it all starts to get interesting. For, while the specifics of the both panel discussions will inevitably be analysed and reviewed, Stephen’s presence (quite apart from his plucky spirit), told a markedly different tale.

For while the committee was zoning in on the balance sheets – and in doing so, attempting to understand within the space of just one hour what was driving price rises and how that impact matched wider long-term industry investments – at the other end of the table, there was some strong consumer selling going on.

Or put in other words, there were the green shoots of some promising domestic energy market competition that was fighting to break onto the scene.

Now sure, the total energy generating capacity and the existing percentage of consumer market share that the likes of Ovo Energy (or indeed Co-Operative Energy for that matter) hold may be very small. And their respective ability to break the Big Six stranglehold on the market may be challenging, to say the least.

However, their inclusion alone marks the start of some promising competition and growth.

And, when you begin to factor in the challenges for generators to obtain competitive power purchase agreements that provide a strong future revenue stream and that reduce the dominance of the industry heavyweights, for profit pressured markets such as wind energy, surely such spirited fighting talk from Stephen can only every be a good thing?