Spark Energy

Last updated

Spark Energy
Industry Utilities
Founded2007 (2007)
FounderChris Gauld & PJ Darling
Defunct23 November 2018 (2018-11-23)
Headquarters
Selkirk
,
Scotland, UK
Area served
United Kingdom
Key people
  • Chris Gauld (CEO)
Products
  • Natural gas
  • Electricity
Number of employees
400 (2018)
Parent OVO Energy
Website sparkenergy.co.uk OOjs UI icon edit-ltr-progressive.svg

Spark Energy was an electricity and gas supplier in the United Kingdom, established in 2007 and headquartered in Selkirk, Scottish Borders. Its operating company Spark Energy Supply Ltd entered administration in November 2018, and industry regulator Ofgem appointed OVO Energy to take over Spark Energy's 290,000 customer accounts; OVO continues to run Spark as a separate brand, but is in the process of migrating all its customers to the SSE brand.

Contents

History

Spark Energy began in 2007 as a small start-up company. [1] The board's background was in the letting industry [2] and they started Spark Energy to fill a gap in the utility market to meet the needs of letting agents, landlords and tenants. [3] The company was established by Canadian entrepreneur PJ Darling, after research into the utilities and property management markets. Co-founder Chris Gauld was the primary driver and leader of the business during the early stages.

Spark was based in a former converted mill building in Town hill after moving from Penlan in 2016. The company made its first profit in 2013. [4] In January 2014 the firm signed a deal with Morgan Stanley. [5] Further growth occurred, which the company attributed to investment in its customer services and marketing. [4] Some rebranding also took place, including the introduction of the tagline 'Bringing Energy to Life'. [6]

In Spring 2014, Gauld was appointed as chief executive [7] after Darling sold his stake in the business. In 2014 they were placed 23rd on the Sunday Times Fast Track 100, the highest-ranked Scottish company on the list. [8]

Spark had a long relationship with both Scottish Enterprise and the Scottish Investment Bank, with the latter having invested around £855,000 with the company since 2008. [9]

In 2015, Spark Energy reported a turnover of more than £80 million. [10] As of July 2015 the company was thought to be one of the five largest employers in the Scottish Borders, with over 300 staff based at their offices in Selkirk, [1] 120 of whom are in customer care. [11] In August 2015 the company recruited three senior executives, increasing the size of its leadership team. [3] The company was granted a temporary derogation from regulator Ofgem from 22B.2(b) and paragraph 4 of SLC 22B of its gas and electricity supply licences in respect of the Affordable Social Housing Prepayment Tariff. [12]

In June 2016, the company announced that a management buyout, led by CEO Chris Gauld and CFO Hamish Osborn, was close to completion in a deal estimated to be worth in excess of £50 million. [13]

In 2016, the company acquired a 50% stake in a Sussex-based telecoms company, Home Telecom Ltd, for an estimated £3 million, as part of a mutual and existing relationship with Country Wide who owned the other 50% of the business. This saw the firm acquire approximately 14,000 telecoms customers.[ citation needed ]

Demise

Spark Energy Supply ceased trading on 23 November 2018 [14] following financial difficulties, including non-payment of £14m to energy regulator Ofgem under the Renewables Obligation scheme. [15] Ofgem appointed Bristol-based OVO Energy to take over the 290,000 customer accounts, and OVO also acquired Spark Energy Limited. [16] [17]

As of 2021, OVO continues to use the Spark brand and is in the process of moving all remaining Spark customers to its SSE brand. [18] [19] [20] OVO initially retained the company's Selkirk offices and staff, [21] but closed those offices in 2020. [22]

Issues

While establishing itself in the marketplace, the company had attracted a substantial number of complaints. [23] Their business model meant that tenants did not get to choose their supplier, with Spark Energy inheriting customers from property owners, demanding payments and forcing customers to have the firm as their energy supplier. [24] BBC Radio 4’s You & Yours consumer programme revealed that Spark Energy employees had posed as some of these customers, moving people with chronic debts to other energy firms without their knowledge, using their personal details. [24] In 2015 they were fined £250,000 by Ofgem, after they were judged to have mistreated customers during the 2010–2013 period by impersonating customers to switch 'undesirable' customers from whom payment was difficult to collect, to other suppliers, a term known in the industry as 'erroneous transfers'. [11]

The company rebranded and undertook a several-year-long campaign in an attempt to revive their image and customer service practices, and in the 2014 Which? Switch energy satisfaction survey, Spark Energy outranked all of the "big six" providers. [7] However, in the 2017 Which? survey Spark was ranked 30th out of 31 providers. [25]

Related Research Articles

<span class="mw-page-title-main">Scottish Power</span> British energy company

Scottish Power is a vertically integrated energy company based in Glasgow, Scotland. It is a subsidiary of Spanish utility firm Iberdrola.

The Renewables Obligation (RO) is designed to encourage generation of electricity from eligible renewable sources in the United Kingdom. It was introduced in England and Wales and in a different form in Scotland in April 2002 and in Northern Ireland in April 2005, replacing the Non-Fossil Fuel Obligation which operated from 1990.

Centrica plc is a British multinational energy and services company with its headquarters in Windsor, Berkshire. Its principal activity is the supply of electricity and gas to consumers in the United Kingdom and Ireland.

<span class="mw-page-title-main">Office of Gas and Electricity Markets</span> United Kingdom government non-ministerial department

The Office of Gas and Electricity Markets (Ofgem), supporting the Gas and Electricity Markets Authority (GEMA), is the government regulator for the electricity and downstream natural gas markets in Great Britain. It was formed by the merger of the Office of Electricity Regulation (OFFER) and Office of Gas Supply (Ofgas).

<span class="mw-page-title-main">Energy policy of the United Kingdom</span> Overview of the energy policy of the United Kingdom

The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective. Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist.

Southern Electric plc was a public limited energy company in the United Kingdom between 1990 and 1998, when it merged with Scottish Hydro-Electric plc to form Scottish and Southern Energy plc. The company had its origins in the southern England region of the British nationalised electricity industry. Created in 1948 as the Southern Electricity Board, in 1990 it was privatised by being floated on the London Stock Exchange.

<span class="mw-page-title-main">Npower (United Kingdom)</span> UK-based electricity generator and supplier of gas and electricity

Npower Limited is a British supplier of gas and electricity to businesses. It has been a subsidiary of E.ON UK since January 2019. The company was formerly known as Innogy plc and was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index.

<span class="mw-page-title-main">Scottish Hydro Electric</span>

Scottish Hydro plc was a public electricity supplier formed on 1 August 1989 after a change of name from North of Scotland Electricity plc on that date. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but merged with Southern Electric in 1998.

<span class="mw-page-title-main">British Gas</span> Energy and home services provider in the United Kingdom

British Gas is an energy and home services provider in the United Kingdom. It is the trading name of British Gas Services Limited and British Gas New Heating Limited, both subsidiaries of Centrica. Serving around twelve million homes in the United Kingdom, British Gas is the biggest energy supplier in the country, and is considered one of the Big Six dominating the gas and electricity market in the United Kingdom.

Utility Warehouse is a multiservice provider based in London, England that uses multi-level marketing to obtain customers through independent distributors. It is a brand name of its parent company, Telecom Plus. It currently handles over 886,000 customer accounts with the help of over 60,000 independent distributors. Utility Warehouse supplies customers with landline telephony, mobile telephony, broadband, gas, and electricity. The Utility Warehouse brand is the primary engine of revenue generation for Telecom Plus.

<span class="mw-page-title-main">SSE plc</span> British energy company

SSE plc is a multinational energy company headquartered in Perth, Scotland. It is listed on the London Stock Exchange, and is a constituent of the FTSE 100 Index. SSE operates in the United Kingdom and Ireland.

OVO Energy Energy supply company based in Bristol, United Kingdom

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

Shell Energy Retail Limited is the UK consumer gas, electricity and broadband operations business of Shell. The business is expected to be acquired by Octopus Energy in the last three months of 2023.

Co-op Energy is a British energy supply company based in Warwick that began trading in 2010. It sells renewable electricity and gas to its ethically concerned member owner/customers and is a established large operator, an alternative to the Big Six energy suppliers. Given that its parent is Midcounties Co-operative, it is the only co-operative supplier in the British market, meaning members can receive dividends and/or interest on their trade with the business. Since August 2019, energy supply, billing and customer service have been operated by Octopus Energy.

The Big Six were the United Kingdom's largest retail suppliers of gas and electricity, who dominated the market following liberalisation in the late 1990s. By 2002, six companies – British Gas, EDF Energy, E.ON, RWE npower, Scottish Power and SSE – had emerged from the 15 former incumbent monopoly suppliers.

<span class="mw-page-title-main">Solarplicity</span> Energy supply company in the United Kingdom

Solarplicity Energy Limited was a renewable energy company based in Hertfordshire, England. In August 2019 the company became the 13th energy supplier to collapse since 2018, affecting around 7,500 domestic and 500 business customers.

Stephen James Fitzpatrick is a Northern Irish businessman, founder of OVO Energy, Vertical Aerospace and former owner of the Manor Racing team.

Extra Energy Supply Ltd was an independent retail energy supplier based in Birmingham, England. It supplied gas and electricity to domestic and small business customers. Extra Energy was part of Extra Holding, which operates in industries including telecoms, travel, insurance and energy.

<span class="mw-page-title-main">Robin Hood Energy</span>

Robin Hood Energy was a not-for-profit energy company launched in September 2015 by Nottingham City Council as a competitor to the "big six" energy suppliers in the United Kingdom. The company supplied gas and electricity nationally to homes and businesses until September 2020, when its customer accounts were sold to Centrica, the parent company of British Gas.

<span class="mw-page-title-main">Bulb Energy</span> British energy supply company

Bulb Energy Ltd., trading as Bulb, was an energy supply company in the United Kingdom acquired by Octopus Energy in 2022. Founded in 2013, the company attracted venture capital from DST Global and Magnetar Capital and ran at a financial loss while achieving rapid growth in customers. Bulb claimed to provide electricity and gas from renewable or off-set sources. As of November 2021, it had a share of approximately 5-6% of the UK energy market and was considered the seventh largest in the country.

References

  1. 1 2 "Spark set to take on 60 new staff". Selkirk Weekend Advertiser. 24 July 2015. Retrieved 21 November 2015.
  2. ↑ "Chris Gauld, co-founder, Spark Energy: plugged in to power". The Financial Times. 12 April 2016. Retrieved 12 April 2016.
  3. 1 2 Wright, Scott (13 August 2015). "Spark Energy launches job drive". The Herald . Retrieved 21 November 2015.
  4. 1 2 "Spark Energy sees turnover rise sharply". The Daily Telegraph. 26 May 2013. Retrieved 13 January 2016.
  5. ↑ Jeff, Dominic (23 January 2014). "Spark Energy lands Morgan Stanley contract". The Scotsman . Retrieved 21 November 2015.
  6. ↑ West, Gillian (15 April 2014). "Spark Energy rebrands to take on the 'Big Six' following Morgan Stanley deal earlier this year". The Drum. Retrieved 21 November 2015.
  7. 1 2 McConnell, Ian (25 June 2014). "Scottish Investment Bank funding for Spark Energy up to £855,000". The Herald. Retrieved 21 November 2015.
  8. ↑ Argo, Andrew (8 December 2014). "Growth of Forfar-based RMEC earns recognition in Sunday Times Virgin Fast Track 100 league table". The Courier . Retrieved 21 November 2015.
  9. ↑ "Spark Energy plugs in to a bright future". www.scottish-enterprise.com. Retrieved 19 January 2016.
  10. ↑ Wright, Scott (24 January 2015). "Spark sees profits soar beyond £1 million". The Herald. Retrieved 21 November 2015.
  11. 1 2 "Selkirk firm Spark Energy to pay £250,000 for rules breach". BBC News. 16 February 2015.
  12. ↑ "Energy watchdog sanctions new pre-payment tariff | News | Inside Housing". www.insidehousing.co.uk. Retrieved 19 January 2016.
  13. ↑ "Management buyout bid at Selkirk-based Spark Energy". BBC News. Retrieved 28 July 2016.
  14. ↑ "SPARK ENERGY SUPPLY LTD". Companies House. Retrieved 26 April 2019.
  15. ↑ "Spark Energy Supply ceases trading". BBC News. 23 November 2018. Retrieved 23 November 2018.
  16. ↑ "Spark Energy Limited: filing history". Companies House. 28 November 2018. Retrieved 26 April 2019.
  17. ↑ "Ofgem appoints Ovo Energy to take on customers of Spark Energy Supply Limited". Ofgem. 27 November 2018. Retrieved 26 April 2019.
  18. ↑ "SSE migration: Frequently Asked Questions - Spark™ - Bringing Energy to Life". www.sparkenergy.co.uk. Retrieved 18 September 2021.
  19. ↑ "SSE and Spark". sse.co.uk. Retrieved 18 September 2021.
  20. ↑ "Ovo to be UK's second-largest energy supplier after £500m SSE deal". the Guardian. 13 September 2019. Retrieved 18 September 2021.
  21. ↑ "Energy supply switch going 'smoothly'". BBC News: South Scotland. 28 January 2019. Retrieved 26 April 2019.
  22. ↑ Janiak, Kevin (19 May 2020). "Nearly 400 Borders jobs at stake as Ovo Energy closes its Selkirk office". www.thesouthernreporter.co.uk. Retrieved 18 September 2021.
  23. ↑ "Selkirk-based Spark Energy investigated by Ofgem". BBC News. 28 June 2013.
  24. 1 2 Neal, John (23 December 2013). "Spark Energy 'impersonated customers' to remove 'debtors'". You & Yours . BBC.
  25. ↑ Ingrams, Sarah. "Which? energy survey results". Which? . Retrieved 19 June 2018.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.