France's Engie hands UK home energy customers to challenger Octopus

LONDON (Reuters) - French power group Engie ENGIE.PA will quit the British residential energy supply market and hand its 70,000 residential customers to renewables specialist Octopus Energy, the companies said on Monday.

FILE PHOTO: A logo of French energy company Engie is seen at an office building in La Defense business district in Courbevoie near Paris, France, October 12, 2019. REUTERS/Regis Duvignau

The move is the latest shift in a changing British energy market previously dominated by six big suppliers - Centrica's British Gas CNA.L, SSE SSE.L, EDF Energy EDF.PA, Iberdrola's Scottish Power IBE.MC, E.ON EONGn.DE and Innogy's IGY.DE npower.

SSE completed the sale of its retail business to OVO Energy this month and npower was taken over by E.ON in an asset swap with Germany's RWE RWEG.DE.

Smaller, nimbler brands such as Octopus - aided by their lower overheads and cheaper offerings - have been fast eating into the market share of the traditional suppliers.

“Our technology enables a lower-cost transition and our rapid growth means we can bring the benefits of cheaper, greener, smarter energy to ever more customers,” said Octopus Energy Chief Executive Greg Jackson.

Engie customers joining Octopus will receive renewable electricity as standard, making the switch over the next few months, Octopus said.

Octopus Energy already has about 1.4 million British energy customers, giving it roughly 5% of the market.

No financial details of the deal were disclosed, though a statement from Engie’s UK and Ireland boss Nicola Lovett said that the French company remains committed to the UK and will continue to invest in the country.

“Our decision to exit the UK residential energy supply market is driven by our focus on activities closely aligned to our UK strategy of making zero carbon happen for businesses and local authorities,” Lovett said.

Engie launched its British residential energy supply business in May 2017 before regulator Ofgem imposed a price cap last year on the most widely used tariffs.

The company’s portfolio of business energy customers and district energy supply operations will be unaffected by the deal.

Reporting by Susanna Twidale; Editing by Louise Heavens and David Goodman