Sweden’s state-owned energy giant is close to ending its ill-fated foray into the British energy retail market by offloading its operations to EDF Energy, the French utility.
Sky News has learnt that Vattenfall, which entered the UK industry barely two-and-a-half years ago with the takeover of iSupply Energy, is on the brink of a deal to sell the business.
EDF, which already has just over five million residential gas and electricity customers in the UK, will add just over 100,000 households to its customer base once the deal completes.
Sources close to EDF suggested the acquisition was likely to be announced within days.
The value of the transaction for EDF to buy iSupply, which is based in Bournemouth. was unclear on Thursday.
Vattenfall’s decision to exit the UK market comes three months after it was fined £1.5m by Ofgem, the industry regulator, for overcharging customers.
The deal will underline how even those suppliers with huge corporate balance sheets behind them have struggled to make their UK operations financially attractive in a market whose returns are largely driven by the price cap overseen by Ofgem.
Magnus Hall, Vattenfall’s chief executive, said in December: “[The UK] is a very difficult market right now, with the cap and a lot of customers changing suppliers and disruption in terms of suppliers going bankrupt.
“There is absolutely a difficulty in earning money in this market right now as a retailer.”
Ofgem is understood to have been informed about EDF’s proposed acquisition of iSupply.
EDF recently took a controlling stake in Pod Point, the provider of electric vehicle charging infrastructure, to broaden its offering to British consumers.
The French government-backed group announced in December that it had appointed Philippe Commaret as managing director of EDF Energy Customers, the name for its retail operations in the UK.
In addition to its domestic customer base, it has about 180,000 business customer accounts.
Sky News revealed last August that Ovo Energy was to buy SSE’s retail business in the UK, catapulting it into the ranks of the industry’s biggest players.
EDF, which is also behind the new nuclear power station at Hinkley Point, declined to comment, while Vattenfall did not respond to a request for comment.