Avro Energy started as one of the most promising companies in the UK energy market. This company focused mainly on delivering customers with detailed electrical bills, cheap tariffs, and great customer service. While the company was not focused on providing green energy, it had an honest purpose.
This electricity supplier had been rapidly growing in the industry up to 2021. In this article, we will analyze every aspect of the company, how the company came to be, its potential in the energy market for customers, what happened to it, and what its customers can expect in the future.
Is Avro Energy Going Bust?
Until early 2021, most electrical suppliers in the UK were doing as fine as they could, considering the COVID-19 pandemic economic consequences.
Since the economy reopened in 2021, Asia lowered the supply of liquefied gas, making the price of this energy-generating resource to hit a new record high. With the price increase of a component so vital for electrical power generation, many UK electrical suppliers went bust.
Figure 2: UK Natural Gas Futures – Source: The ICE
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The price for UK natural gas, traded on December 20, 2020, at $50.99. By December 2021, the price has already risen to $344.9, setting a new record high increase of 676.40% in just one year.
Up to date, more than 1.5 million UK electrical customers have been forced to switch electrical suppliers, due to several suppliers going bust. Sadly for Avro Energy and its customers, this company too ceased supplying electricity by September 26, 2021.
After Bulb Energy Limited, Avro Energy is the largest electrical supplier to go bust in 2021. Around 600,000 customers of the company had to switch companies to another supplier this year.
Who is Avro Energy?
Avro Energy was founded in 2012. The company was created as an initiative by Jake Brown to rectify problems that UK customers faced with the energy industry.
By December 2015, just 3 years after its creation, Avro Energy became part of the UK energy market. This company competed against very large electricity suppliers, engaged with customers, and sold electrical power and gas for some of the cheapest tariffs in the UK industry.
The popularity of Avro Energy grew so rapidly, that in 2020 it was positioned as the 3rd best electrical supplier in the UK, according to polls surveyed by Which?. These polls positioned Avro Energy only behind Octopus Energy and Outfox the Market.
Avro Energy Market Review
While Avro Energy is considered by customers as the 3rd best electrical and gas supplier in the UK, this company was still fairly new, only holding a small percentage of the market shares in the energy market. In the third quarter of 2019, the company held around 1% of the electrical retail market in the UK.
Figure 3: Electricity supply market shares by company: Domestic (GB) – Source: Ofgem
Due to its competitive approach and deep focus on customer service, Avro Energy rapidly grew popular among the British population. In the first quarter of 2020, the company grew to hold 1.4% of the energy retail market, in the second quarter it held 1.6%, and by the third quarter, it already held 1.9% of it.
In 2021, Avro Energy had already grown to hold around 2% of the energy market shares in the UK. Unfortunately, with the increasing prices of liquefied gas, the company could not sustain itself in the UK energy market and went bust by the third quarter of 2021.
After Avro Energy went bust, all of the clients of this electrical supplier were transferred to Octopus Energy Limited. This means that the 580,000 electrical customers and 2% of the retail market held by Avro Energy, are now managed by Octopus Energy Limited.
Does Avro Energy Offer Still Offer Plans & Pricing?
Unfortunately, for UK electricity customers looking for a new electrical supplier just learning about the Avro Energy, this company does not offer plans nor prices anymore. If you were already a customer of Avro Energy, your account will now be managed by Octopus Energy Limited. This means that you should look into the offered plans & prices offered by Octopus Energy Limited.
Avro Energy Problems
Even though around 26 energy suppliers in the UK have gone bust in 2021, there are still some companies surviving the UK energy crisis. So, considering that Avro Energy was doing such amazing work for its customers, what problems caused it to go bust?
Price of Liquefied Natural Gas
One major problem causing the fall of Avro Energy is the gas supply crisis in 2021. Due to the price of the main fuel used to generate power increased by 676%, the bankrupt of this and many other companies became imminent.
Another reason causing Avro Energy to go bust is the fuel mix of the company. While some of the Big Six electrical companies diversified their power generation portfolio, Avro Energy relied too much on Natural Gas.
Up to 72% of the energy supplied by Avro Energy, came from Natural Gas, while only 16.5% of the power came from clean energy, including Renewable sources and Nuclear power. Relying that much on Natural Gas, caused Avro Energy to go bust when the prices of Liquefied Natural Gas went rocket high.
Cheap tariffs and Administrative Problems
Finally, one of the best features of Avro Energy became one of the pillars of its downfall: affordable electrical tariffs. Because the company aimed to be one with the people, delivering cheap electricity and operating at low margin profits, Avro Energy did not have enough to sustain itself in the end.
Since the company did not generate its Renewable energy, Avro Energy had to provide payments to support the Renewable Obligation (RO) scheme. In the end, the company was struggling to pay £56m owned to the support of the RO scheme and went bust owing £90m in total to its customers.
What Changes Now?
If you are a customer of Avro Energy, it is understandable to feel confused amidst the energy crisis in the UK. The company supplying your electric power and perhaps even your natural gas went bust, and now you feel adrift, well, do not worry, because The Office of Gas and Electricity Markets (Ofgem) will be handling the situation.
Since September 26, 2021, all of the 600,000 electrical customers supplied with power by Avro Energy shifted electrical suppliers automatically to Octopus Energy Limited. Since December 16, 2021, your old Avro Direct Debit plans have been transferred to your Octopus Energy account. If you made Direct Debit payments to your old account, these will be shortly transferred to your Octopus Balance.
In the case that you were switching electrical suppliers from Avro Energy to another company, there is no need to worry. As long as your new electrical supplier is still operating, the switching will go as planned.
When Avro Energy was operating, the company focused on providing the best customer service. Up to date, they are still attentive to any doubts or inconveniences that their former customers might have.
If you have a problem with switching from Avro Energy to Octopus Energy Limited, want to ask for any detailed information, or have any questions, there are several ways in which you can contact the Customer Service of Avro Energy. These contact methods are the following:
- You can email the company via [email protected].
- Chat directly via the Avro Energy Website.
- Write a letter to the following address:
Avro Energy Limited, Wheatfield House, Wheatfield Way, Hinckley, LE10 1YG.
Since you are now a customer of Octopus Energy Limited, you might also want to consider contacting your new electrical supplier. You can contact this company regarding any Avro Energy inconvenient by:
- Writing an email to [email protected]
Avro Energy aimed to provide cheap tariffs with simple explanations for the power consumption and the cost of the electrical bills. This feature made Avro Energy very popular among its customers.
In the surveys by Which?, Avro Energy positioned itself as the 3rd best electrical supplier in the UK. According to polls surveyed by Trustpilot to electricity customers in the UK, the company was rated 4.4/5 stars, positioning itself as one of the best ones in the UK.
How Green Is Avro Energy’s Energy?
For old customers of Avro Energy looking to know how green your energy was, you might not find a sweet answer. Foremost, this company did not generate its energy, instead, Avro Energy bought energy from wholesale energy market generators. The fuel mix portfolio of this company is the following:
- 6.3% of the energy supplied is generated with coal.
- 72.0% of the energy comes from natural gas generation.
- 8.2% of the energy is generated from Nuclear power.
- 8.3% of the energy comes from renewable sources.
- 5.2% of the energy is generated by using other fuels.
As you can see in the fuel mix of Avro Energy, this company was not very green. Avro Energy only bought 16.5% of its power from clean energy sources, with nearly 8.2% of that percentage coming from nuclear energy. Considering this, up to 83.5% of the energy delivered by Avro Energy was not considered green.
FAQ – Frequently Asked Questions
How many customers does Avro Energy have?
Up to 2021 when Avro Energy went bust, the company had 580,000 electricity customers. Since some of the customers shared a gas service while others ordered exclusively the gas service, the company had around 600,000 customers.
Who has taken over Avro Energy customers?
Since September 26, 2021, all of the Avro Energy customers were transferred to Octopus Energy Limited. This process was possible thanks to the Supplier of Last Resort (“SoLR”) regulated process established by Ofgem, the UK energy regulator.
All of the assets, credits, and debts from the old Avro Energy account, will also be transferred to the new account in Octopus Energy Limited. You can check more updates about the transfer on the Official Avro Octopus Information page.
Does Avro Energy have an app?
Currently, Avro Energy does not have a smartphone app, nor did it in the past when the company was operating. When the company was active, everything you wanted to do, you could do it directly through the user section of the official website.
Does Avro Energy Use Smart Meters?
According to the Avro Energy website, they were working on adding the use of Smart Meters to their list of products. Since the company went bust, they are not currently installing smart meters nor will they in the future.
Verdict on Avro Energy
Avro Energy was a loss to the customers of the UK energy market looking for a change. Since its beginnings, this company focused on the people, delivering a very detailed electrical bill, providing some of the cheapest available tariffs, and creating quality plans for their customers.
Perhaps with a few more years, Avro Energy would have gotten the chance to increase its renewable portfolio and deliver cheap green energy for its customers. Unfortunately, this will not be possible anymore, since the company went bankrupt.
Like many others companies amidst the energy crisis in the UK, Avro Energy fell victim to the rocketing prices of liquefied natural gas.