Haven Power it seems have taken an Autumnal leaf out of the fashion industry’s book lately. They have taken the view that if you continue offering the same product year after year, season after season, interest can stagnate and relying on the simple core demand for your product is not sufficient in what is becoming a much less straightforward energy marketplace. So, as we head into Winter, Haven are announcing a whole new line of products that they are enthusiastically parading down the proverbial catwalk of the UK business energy marketplace.
Ultimately the product Haven offers is still at its core, electrical power. Their new range would best be described as an evolution of supply rather than a revolution. However what they are now presenting is a variety of ways that this supply is packaged and crucially, priced. The motivation for these new products? Haven will tell you they are keen to offer protection to the client from escalating costs and insurance against sudden, unexpected price rises due to third party overheads. At the forefront of their mind is no doubt the customer reaction to Haven raising the pre-agreed unit cost for power on existing contracts earlier in 2012 (a rise they were contractually entitled to implement). In addition, Haven are keen to give the client a practical but conscientious environmental option when choosing your energy supplier. In this instance their inspiration may be partly derived by recent announcements by Haven’s parent company, Drax. Following an October share placement, Drax will soon be instigating large scale conversion from coal powered electricity generation to combined coal and biomass generation due to a shift in government subsidy policy that favours conversion of existing facilities to biomass rather than wholesale facility construction.
Two of the most prominent offerings will be the choice between Haven Assured power and Haven Standard power. With Assured the main feature of the product is that the contract will be ‘fully fixed’. The energy unit cost you pay will never increase for the duration of the contract term. Many customers may have taken this as read, as it could seem to be one of the core tenets of an energy contract, especially the longer terms ones. However, Haven like all UK energy suppliers have until now reserved the right to raise your unit price during your contract if what they term ‘third party prices’ rise. This is nothing to do with the wholesale price of energy, that is indeed fixed. But rather these costs relate to the supplementary costs of providing you this power (transport, transmission, government levies etc). Haven Assured factors in the potential for these rising, protects the client from them and insures Haven from taking a financial hit if they do. Haven Standard quite simply does not factor these potential rises in. The pro being that it is of course cheaper than Assured, but the con being you remain exposed (albeit only slightly as third party cost rises are infrequent) to a potential cost rise during the course of your contract.
The view as to whether the client should opt for Assured or Standard power is really one of for the client and we wouldn’t offer a ‘one size fits all’ recommendation for one over the other. A cynic may argue that when Haven announced across the board price rises earlier in 2012 due to rising third party costs, they took, what we shall politely term, a hammering from clients. There was little understanding or sympathy from the client’s for Haven’s argument that they had been bearing rising costs for years and they were simply no longer able to maintain these costs, and a profit. There is no doubt that as a result, clients were lost and levels of trust between Haven and customer were damaged. Haven by giving these two options has passed all the responsibility for predicting whether third party prices will rise or fall to the client, quite a responsibility bearing in mind many customers have no clue what third party costs are, never mind if they’re likely to rise or fall! However, in Haven’s favour the fact remains that the client retains a choice. If the client wants to take their chances that prices will hold they can benefit from the cheaper rates that Haven Standard offers. And based on our experience this is definitely the option most clients are taking. A bit of buck-passing from Haven perhaps, but with the client ultimately retaining the right to decide, these products are certainly not a bad thing!
The other prominent new product on offer from Haven is Climate Change Levy (CCL) exempt electricity. For those unfamiliar with precisely what CCL actually is, it is a tax on energy delivered to non-domestic users in the United Kingdom. Its aim is to provide an incentive to increase energy efficiency and to reduce carbon emissions. Haven’s new CCL exempt product offers power supplied from CCL exempt sources, which vary from entirely clean methods such as wind power through to preferred methods of energy production to fossil fuel powered generation, primarily burning biomass. Undoubtedly a heavy influence behind this product is an aforementioned shift in plans for Haven’s parent company, Drax. Drax operate the UK’s largest coal powered power station in Selby, Yorkshire. And, like many other energy generators Drax had planned to build new purpose built biomass power stations that would fuel their green energy needs going forward. However due to a recent change in government policy, subsidy support now heavily favours the conversion of existing stations rather than the building of new ones. Therefore Drax will be converting their Selby plant so that by 2016, half the energy generated there will be from burning biomass rather than coal. This will give Haven access to significant resources of energy that whilst not perhaps green in the sense the public may assume (wind, solar, hydro etc), is CCL exempt. Haven are able to offer rates that are tied into the level of CCL. Therefore if you opt for CCL exempt electricity you will pay for your energy at a higher unit rate, risen precisely by an amount to match the level of CCL had it been applied, therefore offering you the same overall price as traditional ‘brown energy’.
Frankly this one seems a bit of a ‘no brainer’. Essentially Haven are offering clients (who are not CCL exempt already) energy generated from much cleaner sources than brown energy, for the same price. Working on the assumption that whilst not every business client is passionate about helping the environment, there aren’t many people out there intent on harming it. Therefore this seems a great product to give you the electricity you need and enhance your company’s green credentials at the same time… for no extra cost!
So there you have it, Haven’s new Winter line of products. To return to our fashion industry comparison at the start, only time will tell if these new options represent a passing style or if Haven are setting a whole new trend for the business energy market.
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