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OVO Energy

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OVO Energy Ltd
IndustryRetail supply of energy
Founded2009; 15 years ago (2009)
HeadquartersBristol, England, UK
Subsidiaries
Websitewww.ovoenergy.com Edit this at Wikidata

OVO Energy is a major energy supplier based in Bristol, England.

It was founded by Stephen Fitzpatrick and began trading energy in September 2009, buying and selling electricity and gas to supply domestic properties throughout the UK. By June 2017 OVO had 680,000 customers, an increase of 10,000 over the previous year, representing a 2.5% domestic market share.[1] In November 2018, OVO Energy acquired one of its largest competitors, Spark Energy. Although at first one of over 15 smaller energy companies competing with the Big Six which dominated the market, in January 2020 OVO completed the acquisition of the retail arm of SSE, becoming itself one of the Big Six and the country's third-largest domestic energy supply company.

History

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OVO Energy is British-owned and privately backed by big oil, with its headquarters in Bristol. OVO Energy supplies gas and electricity to domestic customers since 2009.[2] This sector of the UK economy is dominated by a number of larger companies known as the Big Six.[3]

OVO Foundation

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OVO’s charity arm, OVO Foundation, was founded in 2014 and supports climate action and education in schools across the UK and communities internationally.

Energy and Renewables

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OVO’s aim is to move away from gas and help create an energy system driven entirely by renewable generation to decarbonise homes and power them with renewable energy. It partnered with multiple both large and small-scale renewable generators, including: Orsted [2021], Ambition Community Energy, Genatec, St Fergus Energy Park and Atrato Onsite Energy plc [2023].

Sustainability

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Plan Zero [4] is OVO’s response to the climate crisis. The three areas of focus include: Climate, Customers, and Culture. It outlines OVO's path to decarbonisation with a 2035 net-zero target. Since 2018, OVO has seen an over 50% reduction in operational emissions. OVO has committed to limiting its carbon offsetting to just 10% of its total emissions.[5]

Electricity

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Electricity supplied by OVO Energy comes directly to homes from the National Grid. As with all electricity this means it comes from various sources like wind, solar, natural gas and nuclear. In 2023 OVO stopped selling 100% renewable energy tariffs purely backed by renewable energy certificates known as REGOs [6] OVO provides an add-on that allows customers to get 100% renewable electricity backed by power purchase agreements. [7]

OVO's "pay as you go" product has been branded as Boost since 2017. After taking on customers from Economy Energy in 2019, the brand had around 350,000 customers.[8]

Gas

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OVO Energy sources its gas from the national grid.[9] The majority of the UK's gas is sourced from the North Sea; the rest comes from Norway, Continental Europe and some from further afield. Increasingly, gas is imported as liquefied natural gas (LNG), natural gas cooled to about −165 °C (−265 °F) and compressed to make it easier to transport.

Solar

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OVO launched OVO Solar [10] in 2023. This offered customers solar photovoltaic (PV) panels, batteries, inverters and a Smart Export Guarantee (SEG) rate.

Products

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OVO energy provides numerous schemes and products to its customers. These include:

Power Move: This challenges customers to move their non-essential electricity to a different time of day, and only use 12.50% or less of your electricity during peak hours of 4pm to 7pm, Monday to Friday. It allows customers to earn money off their energy bill when they complete this challenge. [11]

Heat Pumps:[12] Working in partnership with Heat Geek, OVO are offering Heat Pump Plus - this gives customers a rate of 15p per kWh, a cheaper alternative to gas boilers.

Corgi:[13] In 2017 CORGI HomePlan became part of the OVO group. They’re a boiler and home emergency provider in the UK, that currently provide their services to more than 165,000 customers.

OVO Beyond: [14] This is an exclusive app for OVO customers, allowing them to manage their energy and get personalised tips, exclusive offers and advice.

Charge Anytime: [15] This allows customers to charge their EV from their home, accessing cheaper rates than they would in public (by charging your car at the cheapest times possible).

Acquisitions and Investments

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Spark Energy: In November 2018, OVO acquired one of its rivals, Spark Energy, after the troubled supplier ceased trading.[16]

The 2018 acquisition of Spark Energy included a subsidiary, Home Telecom Limited, which specialises in providing telephone and broadband services to tenants of private landlords.[17][18]

SSE Energy Services: In September 2019, OVO agreed to pay £500 million for SSE Energy Services, the retail business of SSE plc,[19][20] and the purchase – which included SSE's 8,000 employees and their phone, broadband and heating insurance customers – was completed in January 2020.[21] This made OVO the UK's second-largest energy supply company (after British Gas) with around 5 million customers.[21] OVO stated that the SSE brand would continue for the time being.[22] SSE had earlier intended to merge the business with Innogy's subsidiary Npower, but this was called off in December 2018.[23] Following OVO Energy's takeover of SSE, numerous reports of incorrect and inflated bills were reported by former SSE consumers who had their accounts transferred to OVO Energy.[24][25]

Bonnet: On Friday 24th November, London, OVO announced that it had successfully completed the acquisition of public EV charging consumer app Bonnet. It allows EV drivers to have access to over 27,000 chargers at 7,000 locations. EV drivers can locate, use and pay for public charge points without switching between different cards or logins.

Mitsubishi Corporation: On 14 February 2019, Mitsubishi Corporation bought a 20 percent stake in OVO, valuing the company at £1bn.[26]

Energy market competition

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The entry of OVO into the UK supply market in 2009 was welcomed as it increased competition in a market that had been criticised for high prices.[27][28]

In October 2013, OVO's Founder Stephen Fitzpatrick appeared at the Energy and Climate Change Select Committee, when energy companies were asked to justify recent gas and electricity price rises. Fitzpatrick explained to the committee that the 'wholesale gas price had actually got cheaper', contrary to the Big Six energy suppliers' assertions that international global prices of gas and electricity had consistently risen.[29]

Following the collapse of Economy Energy in January 2019, regulator Ofgem announced that OVO Energy would take on Economy Energy's 235,000 customers.[30]

Sponsorship

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In 2016, OVO sponsored the Bristol leg of the Tour of Britain cycling race.[31] In 2017, the company began sponsoring both The Women's Tour and the Tour of Britain, the longest cycle stage races taking place in the UK.[32] In March 2018, OVO announced they would begin providing equal prize money for both tours.[33] They are no longer sponsoring either race as of 2021.

In October 2021, OVO Energy took over sponsorship of Glasgow's entertainment and multi-purpose indoor arena, which was rebranded as the OVO Hydro.[34] OVO Live allows customers to get access to ticket presales, VIP queue-jump entry, and VIP lounges at OVO Hydro Glasgow and OVO Arena Wembley.

Management

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Stacey Cartwright was appointed as chair of the retail board at OVO Energy in April 2020. She holds other directorships including at Savills, Genpact and the Football Association, and was deputy chair at retailer Harvey Nichols.[35] Non-executive directors include Jonson Cox, chair of water regulator Ofwat.[36][37]

Regulator action

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Since 2020, OVO Energy has remained susceptible to regulatory action, largely due to issues such as unlawful overcharging and sub-par customer service.

In January 2020, OVO Energy agreed to pay £8.9m into Ofgem's voluntary redress fund, after an investigation by Ofgem found instances of undercharging and overcharging, and inaccurate annual statements sent to more than half a million customers between 2015 and 2018.[38] Head of Ofgem enforcement, Anthony Pygram, said "The supplier did not prioritise putting these issues right whilst its business was expanding."[39]

In March 2021, as part of a wider investigation into price protection failings by energy suppliers, OVO's practices were found to have caused detriment to 240,563 customers totalling over £2m, and the company was required to pay redress of over £2.8m – the highest amount of compensation among the 18 companies investigated.[40]

Overcharging of consumers was reported several times in 2022.[41][42][43] In May 2023, Ofgem found that OVO had charged almost 11,000 customers more than the maximum allowed under the Energy Price Guarantee scheme. The company was required to refund and compensate those customers, the average amount being £181 per customer; and to pay £10,000 into Ofgem's redress fund.[44][45]

In 2022, OVO Energy was ranked second worst (only behind Utilita) in customer service by Citizens Advice.[46]

In 2024, multiple widespread reports of customers not getting any cash back when asking for credit refunds prompted Martin Lewis to sound off a public warning on OVO Energy. [47]

References

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  1. ^ "Key facts about OVO Energy". www.ovoenergy.com. Retrieved 9 July 2017.
  2. ^ Mason, Rowena (7 July 2011). "Energy Secretary to help new suppliers break into market dominated by Big Six". The Daily Telegraph. London.
  3. ^ Eaton, George (28 October 2013). "New questions for the big six mean Miliband's price freeze will continue to dominate". New Statesman. Retrieved 24 September 2019.
  4. ^ "Plan Zero". OVO. 18 January 2024. Retrieved 18 January 2024.
  5. ^ "BusinessGreen reports on Plan Zero". OVO. 2023. Retrieved 18 January 2024.
  6. ^ "OVO calls for an end to industry greenwashing". OVO. 2023. Retrieved 18 January 2024.
  7. ^ "Greener Energy". OVO. 2023. Retrieved 18 January 2024.
  8. ^ "About us". Boost. Retrieved 22 January 2020.
  9. ^ "Our fuel mix – Where does OVO get its electricity from?". www.ovoenergy.com.
  10. ^ "Solar panels". OVO. 2023. Retrieved 18 January 2024.
  11. ^ "Power Move". OVO. 2023. Retrieved 18 January 2024.
  12. ^ "Heat Pumps". OVO. 2023. Retrieved 18 January 2024.
  13. ^ "Corgi". OVO. 2023. Retrieved 18 January 2024.
  14. ^ "OVO Beyond". OVO. 2023. Retrieved 18 January 2024.
  15. ^ "Charge Anytime". OVO. 2023. Retrieved 18 January 2024.
  16. ^ "Ofgem appoints OVO Energy to take on customers of Spark Energy Supply Limited". Ofgem. 27 November 2018. Retrieved 8 January 2020.
  17. ^ Dungay, David (17 May 2017). "Spark Takes Aim At Telecoms Partners With Home Telecom Purchase". Comms Business. Retrieved 8 January 2020.
  18. ^ "Home Telecom Limited: Financial Statements to 31 December 2018". Companies House. Retrieved 8 January 2020.
  19. ^ "Ovo to become UK's second largest energy supplier after £500m SSE deal". The Guardian. 13 September 2019. Retrieved 13 September 2019.
  20. ^ Stoker, Liam (13 September 2019). "OVO seals £500 million swoop for SSE supply division". Current News. Retrieved 22 January 2020.
  21. ^ a b Thicknesse, Edward (15 January 2020). "Ovo completes £500m purchase of SSE's retail business". CityAM. Retrieved 22 January 2020.
  22. ^ "Questions about OVO and SSE?". OVO Energy. Retrieved 22 January 2020.
  23. ^ "SSE weighs options as Innogy UK retail merger collapses". Reuters. 17 December 2018. Archived from the original on 17 December 2018. Retrieved 22 January 2020.
  24. ^ "Customers 'receive £80k energy bills moving from SSE to OVO'". Energy Live News. 25 November 2022. Retrieved 25 November 2022.
  25. ^ Tims, Anna (23 November 2022). "UK energy customers receiving bills of up to £49,000 after Ovo takeover of SSE". Guardian UK. Retrieved 23 November 2022.
  26. ^ "Mitsubishi buys 20% stake in greentech company Ovo Energy". Industry Europe. 14 February 2019. Retrieved 2 September 2020.
  27. ^ "Martin Hickman: Suppliers run rings around regulators". The Independent. London. 7 October 2009.
  28. ^ "Newcomers try to shake up the energy market". The Northern Echo.
  29. ^ "Ovo Energy boss 'confused' by larger firms' price rises". BBC News. London. 29 October 2013.
  30. ^ Peachey, Kevin (11 January 2019). "Winter 'will see more energy firms fail'". BBC News. Retrieved 11 January 2019.
  31. ^ "OVO Energy announced as Bristol sponsor for the Tour of Britain". Bristol City Council News. Retrieved 5 January 2020.
  32. ^ "New sponsor for 2017 Tour of Britain and Women's Tour". British Cycling. British Cycling Federation. 20 April 2017. Retrieved 21 April 2017.
  33. ^ Cary, Tom (7 March 2018). "Women's Tour of Britain to be given prize money parity with men's race". The Telegraph.
  34. ^ "The OVO Hydro is the new name for Scotland's home of live entertainment". Ovo Hydro. 14 October 2021. Retrieved 14 October 2021.
  35. ^ Grundy, Alice (20 April 2020). "Chair of new OVO Energy Board appointed after SSE acquisition". Current News. Retrieved 23 February 2021.
  36. ^ Lempriere, Molly (6 August 2020). "OVO Energy continues to grow new board with appointment of non-executive director". Current News. Retrieved 22 February 2021.
  37. ^ "Who we are". Ofwat. Retrieved 23 February 2021.
  38. ^ "Ovo Energy to pay £8.9m for overcharging customers". BBC News. 29 January 2020. Retrieved 29 January 2020.
  39. ^ "Ovo Energy to pay £8.9m for overcharging customers". BBC News: Business. 29 January 2020. Retrieved 29 January 2020.
  40. ^ Williams, Martin (2 March 2021). "'Regret': Scots energy firms ordered to pay millions in compensation for overcharging". The Herald. Retrieved 24 November 2021.
  41. ^ Tims, Anna (2 November 2022). "£19,000 in debt to Ovo: customers' haunting tales of energy bill horror". Guardian. Retrieved 2 November 2022.
  42. ^ Deeney, Yvonne (22 November 2022). "Mum-of-three forced on to prepayment meter by Ovo after energy bill doubled within a month". Guardian. Retrieved 22 November 2022.
  43. ^ Hyland, Jennifer (6 November 2022). "Scots couple charged £13,000 by OVO Energy for energy bill in one night". Daily Record. Retrieved 6 November 2022.
  44. ^ "Good Energy Limited and OVO Energy Limited to pay £4 million for overcharging customers". Ofgem. 18 May 2023. Retrieved 17 December 2023.
  45. ^ Jordan, Dearbail (18 May 2023). "Ovo and Good Energy forced to refund overcharged customers". BBC. Retrieved 16 December 2023.
  46. ^ "Worst customer service on record from energy companies, says Citizens Advice". Citizens Advice. Retrieved 1 July 2022.
  47. ^ "Martin Lewis issues OVO energy warning and says 'staggered by this'". Birmingham Live. Retrieved 15 August 2024.
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