Rivals pounce as Powershop customers abandon Shell
Dec 15, 2021
Junior electricity retailers have pounced on a wave of customers walking away from green power retailer Powershop after news of its acquisition by energy giant Shell, opening up the risk it will be paying over the odds for a diminished customer base by the time the deal completes. Amber Electric, Energy Locals, CoPower and Enova Energy are among those that have jumped on the situation as an opportunity to market their green electricity credentials and poach customers from Powershop, to be owned in future by what Enova describes as “an emitter on a global scale”. Shell’s move into green electricity retailing in Australia has hit some speed bumps. Bloomberg
“We’ve done it! Overnight, we’ve hit 2000 switchers since Shell bought Powershop,” CoPower tweeted. Enova is offering to donate $50 to community-owned renewables projects for each customer that switches from Powershop to Enova, while Amber pledged a $100 donation per switching customer under an offer that has since lapsed. Advertisement
But an estimate that 6000 of Powershop’s 185,000 customers have left it since the deal was announced is disputed by sources close to Shell, who say the figure is in the range of several hundred. Official figures for energy retail customer switching for this quarter will not be released by the Australian Energy Regulator until next year, but only a few Powershop customers are understood to have contacted the service centre with concerns or to advise of their intention to switch. Climate fight ‘abandoned’
The proposed takeover of Powershop by Shell, part of a $729 million asset sale by Meridian, prompted green groups including Environment Victoria and GetUp!, which had for years been channelling potential customers to the retailer, to reverse course and urge them to walk away . Amber Electric took out a full-page newspaper advertisement in late November headed “In loving memory of Powershop” pointing out that customers who stayed with the retailer would be abandoning “the climate fight” given Shell’s status as one of the world’s biggest oil and gas producers. Shell is intending to use the Powershop acquisition to re-enter the household electricity retailing sector on the east coast, adding to the state of flux of the market as big players including Telstra aim to disrupt the domination of the “big 3” players, AGL Energy, Origin Energy and EnergyAustralia. Advertisement
Shell already secured a significant chunk of the business power market through its acquisition of ERM Power in 2019, and has made several acquisitions in clean energy here, including carbon farmer Select Carbon and solar farm developer ESCO Pacific. While the exact price it paid for Powershop remains undisclosed – it is known only to be less than 50 per cent of the total $729 million sale price that also included Meridian’s wind and solar farms in Australia – banking sources say the figure reaches past $1000 per customer, making it expensive compared to other recent deals.