Posted: Monday 16th December 2013

Competition in the multi-utility connections market is set to intensify after leading provider and asset owner Energetics received a substantial new investment.

Affiliates of Macquarie Group Limited (Macquarie), a leading provider of banking, financial, advisory and funds management services, have provided the additional investment.

Energetics, headquartered in Glasgow, employs over 200 people across the UK. It is an independent utility infrastructure specialist, fully accredited to design and build electricity, gas, water and street lighting networks at new-build residential and commercial property sites. The organisation is also a licenced owner and operator of electricity and gas networks and competes directly with traditional utility network companies, such as Scottish Power, which formerly enjoyed monopolies in their regions.

Bill McClymont, chief executive officer, Energetics, said: “We’ve grown consistently in recent years, despite tough market conditions, and the new funding means we can build on this successful history. We’ll now invest to grow market share, create jobs and extend our operations further across the UK, expanding the strong base we already have in Scotland and the North-West and Midlands of England. That will mean choice in utility connections being brought to a far greater number of developers and contractors, which I’m sure they’ll welcome.

“The investment is a huge vote of confidence in our organisation, as the economy picks up and signs of recovery become evident in the construction industry, which we’re now even better-positioned to serve.

“One particularly key objective for us now is making further inroads into the electricity connections market, where competition is not yet well-established, raising awareness of the alternative we provide to regional electricity distribution companies, such as Western Power Distribution and SSE [formerly Scottish & Southern Energy].”

In its Connections Industry Review 2010-11, published last December, regulator The Office of Gas and Electricity Markets (OFGEM) highlighted the marked imbalance between the gas and electricity sectors. It reported that over half of the 177,000 new and modified gas connections were undertaken by third party independent providers such as Energetics compared to only 18 per cent of the 312,000 new electricity connections made during the year.

The report also made clear that this disparity was compounded by electricity connections accounting for 64 per cent of the overall market by volume and a massive 93 per cent by charges levied.

OFGEM also reported, however, some encouraging signs of competition starting to take hold in certain areas of the electricity connections market. It said the overall number carried out by the host distribution network operators, companies licensed to supply electricity in specified geographical areas, fell from 87 to 77 per cent during the period.

Energetics’ asset-holding subsidiaries are fully licensed by OFGEM to own and operate the gas and electricity networks they install, a status enjoyed by few competitors. The company project-manages the design-and-build process, from planning to connection, working closely with operators including property developers, house builders, main contractors and mechanical and electrical consultants.

Among the high-profile developments on which Energetics’ in-house utility engineers and service staff have worked successfully are: Birmingham New Street station, where the company’s delivery of a high-voltage electricity supply will help provide a twenty-first century transport hub for the city and wider West Midlands; Media City UK, the 200-acre mixed use site in Salford, delivered by Bovis Land Lease, now housing the BBC, among other organisations; and Oakgrove Millenium Village, Milton Keynes, a Millenium Communities Programme development comprising of 230 homes, schools and a health centre.

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