Shell to supply homes after buying First Utility

OIL giant Shell will soon begin supplying lighting and heat to British homes in a major deal to buy the biggest energy supply rival to the “Big Six” utilities.

Shell’s European arm will snap up First Utility for an undisclosed sum, giving the oil major a route into the domestic energy supply market in the UK and Germany, as it begins to shift towards clean electricity and developing charging points for electric vehicles.

The landmark deal follows a four-year relationship between the supplier and Shell, through which the Anglodutch company provides First Utility’s wholesale gas and power.

First Utility is one of the largest of a new crop of energy suppliers to have emerged in recent years to challenge the dominance of the Big Six – SSE, EDF, British Gas, Npower, E.ON and Scottish Power.

It supplies around 875,000 UK households. Industry sources have said the deal could kick-start a raft of takeovers within the retail energy market, which is ripe for consolidation.

The growing appetite for a place in the energy market has emerged alongside a boom in digital “smart” home service offerings.

Other companies said to be showing an interest in the industry include telecoms groups, financial service providers and technology firms.

Mark Gainsborough, who heads up Shell’s New Energies division, said: “The biggest growth in the energy market in the coming decade will be in electricity.”