Energy supplier Yü, which suppliers power and gas to SMEs and corporates, will bundle in water services to businesses after Ofwat granted its licence application.
The company will trade as Yü Water.
Selling both water and energy to business clients can potentially deliver savings on administration and procurement costs.
A survey by The Energyst 12 months ago suggested that around nine in ten firms would buy water and energy from a single supplier if it delivered cost savings. TPIs interviewed for the subsequent Directors’ Report suggested consolidated billing may offer savings for large, multisite businesses that may otherwise deal with several regional suppliers.
While some brokers are now leveraging their energy relationships with businesses to supply water, Yü’s move could indicate that more energy suppliers are planning to enter the water retail market, given that both water and energy retail essentially about managing supply and billing customers. Gas supplier Regent acquired a water licence in February.
While some water companies have indicated privately that they may consider entering the energy retail market, no large supplier has yet done so.
Ofwat senior director Emma Kelso welcomed Yü’s market entry: “It’s good news to see suppliers bring different areas of expertise to the water market – with Yü Water bringing theirs from a background in energy,” she said.
Yü Group CEO, Bobby Kalar, said the firm’s “focus remains on our core offering in the provision of energy, however this enables us to offer a bespoke, value-added service to our customers who seek the flexibility of a one-stop-shop for their utility needs”.
He added that Yü’ Group sees “long term opportunities for the company in the water industry”.