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Extended Expert View: Contract tenure in the UK B2B energy marketPublished by: Datamonitor Published: May. 17, 2005 - 13 Pages Table of ContentsTABLE OF CONTENTS EXECUTIVE SUMMARY 3 2004-05: shorter electricity contracts, gas contracts unchanged 3 Two-thirds of customers are currently on contracts lasting 12 months or less 3 Centrica and RWE npower lead the way in longer contracts 3 INTRODUCTION 6 2004-05: SHORTER ELECTRICITY CONTRACTS, GAS CONTRACTS UNCHANGED 7 TWO-THIRDS OF CUSTOMERS ARE CURRENTLY ON CONTRACTS LASTING 12 MONTHS OR LESS 9 CENTRICA AND RWE NPOWER LEAD THE WAY IN LONGER CONTRACTS 10 APPENDIX 12 UK Utilities Strategic Planning Programme 12 Further readings 12 UK Utilities analyst contacts 12 How to contact experts in your industry 12 LIST OF FIGURES Figure 1: Changes in average contract length between 2004 and 2005 7 Figure 2: Calendar year 2005 and 2006 forward gas prices 8 Figure 3: Composition of the survey sample by contract length 9 Figure 4: Composition of the survey sample by featured suppliers’ average contract lengths 10 Figure 5: Featured suppliers’ forward order books in relation to current year 11 AbstractIntroductionWith competition for business energy customers increasingly fierce, UK suppliers are keen to tie their clients into longer contracts. Some of them, such as Centrica and RWE npower, have been reasonably successful in that. Overall, however, suppliers are not having much luck with extending contract tenure, with the average electricity contract getting three months shorter between 2004-05. Scope The brief focuses on the B2B (non-residential) segment of the UK electricity and gas supply markets. Featured in the brief are RWE npower, Centrica, British Energy, SSE, Scottish Power, GDF, E.ON Energy, EDF Energy, Total and Shell Gas Direct. Highlights Despite UK suppliers' efforts in offering longer-term contracts to their business clients, over the last 12 months the average contract tenure has declined by 3 months in electricity and remained static in gas. One possible reason for that is that users are plumping for a shorter contract in expectation of better terms the next time. Centrica and RWE npower lead the way in longer contracts. By contrast, GDF, Centrica, E.ON Energy and Shell Gas Direct are below the industry average. Reasons to Purchase Analysis in the brief is based on the newest research from Datamonitor's 2005 UK B2B Energy Buyer survey. The brief also identifies and explains the main changes in customer attitudes vis-a-vis contract tenure over the last 12 months. Get Full Details About This Report >> |
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