Interview: Luke Watson, founder of Preston-based GB Energy Supply

Luke Watson is the founder and managing director of GB Energy Supply, a Preston-based energy firm working to make waves in one of the UK’s most competitive sectors.

A former Royal Navy submariner, Luke eventually decided to leave active service and embark on a career in the renewable energy sector.

“By 2003 I was working on the government’s Warm Front scheme, and then I had my own company, GB Energy, which provided energy efficient products to homes and businesses,” he told me.

“For years I’d seen how the energy market was dominated by big players that were able to charge customers way over the odds, often with poor customer service.”

While running his former venture, GB Energy, Luke said he identified a real opportunity to allow customers to save money on the same gas and electricity they receive from their current suppliers.

Luke explained: “We launched GB Energy Supply in 2014 and have gone from strength to strength ever since.

“Our business model is simple and different: we keep our costs low and pass on the savings to our customers. Compared to Big Six standard tariffs we could save you over £300 a year.”

The Big Six dominate the market with over 85% of the market share. That’s an enormous nut to crack

In getting GB Energy Supply off the ground, Luke said he was backed by a group of shareholders who are now involved in steering the business on the right path, particularly in the areas of marketing and customer service.

“We want to run a lean business so we can keep costs low for the customer,” Luke added. “We employ 16 people in our Preston head office and have an extended staff of over 175 through our partners who run the call centre, marketing and other operations like that.”

In the last year, GB Energy Supply’s biggest challenge lay in simply making headway in the market and fighting for a prominent foothold.

“The Big Six (British Gas, SSE, Scottish Power, npower, E.ON and EDF) dominate the market with over 85% of the market share,” Luke said. “That’s an enormous nut to crack, even if you can offer much fairer pricing and better service, as we do.”

But Luke is confident that GB Energy Supply has made its name – after just two years of trading and what he called “a steep learning curve” – as a real challenger.

He continued: “People are slowly waking up to the fact that they can save real money by switching, and that the process is not difficult. The number of challenger brands in the marketplace now has more than doubled in the past year as a result and that is chipping away at the Big Six market share.”

Luke added: “We’ve exceeded our expectations of where we thought we’d be after just one year.”

70% of people are languishing on Big Six standard tariffs, paying £300-400 more than they need to

In the year to come, Luke said inertia will continue to prevent people from getting up and making the decision to actively seek out cheaper energy deals. It’s something he believes will always be a problem.

“70% of people are languishing on Big Six standard tariffs,” he said, “paying £300-400 more than they need to.

“Related to that, the CMA’s [Competition and Markets Authority] report into the energy market in March has thrown up some serious questions. Price comparison sites will no longer have to show the all the best deals available, which swings the market back in favour of the Big Six, who rely on the comparison sites to bring in new customers.

“I can’t see how that will be good for the consumer. The comparison sites are commercial enterprises making money from fees. The expense of paying a comparison site will have to be passed on and the cost of energy will likely start to creep back up.”

However, in the face of towering challenges, and despite the fact that GB Energy Supply doesn’t pay to appear on comparison sites, the company managed to grow over the last year. Luke told me that “good value tariffs, excellent customer service and coming product innovations” all continue to play a role in safeguarding the business’ future.

You have to make people realise that when they switch, their energy doesn’t change

But how can a small company compete effectively against the Big Six?

Luke said the answer is simple. “We have seen that if your tariffs are good value and offer good customer service then you make progress, the last year has proved that for us.

“You have to make people realise that when they switch, their energy doesn’t change. It’s still the same gas that comes through the pipeline; it’s just that it’s better value for money.”

While Luke, born and raised in Preston, chose his hometown for the headquarters of GB Energy Supply, he’s keen to position the firm as a national brand with a national customer base.

So far, the company has served around 100k customers from across the UK, with Luke placing the overall savings for the British public at more than £14m.

Millions of Brits are languishing in fuel poverty and we must be a part of the solution to that

Over the next five years, he wants to see the business continue to grow and become a leading UK supplier “in terms of value, service and innovation”.

He said: “There are lots of issues in energy at the moment and it’s a fascinating time to be involved in the sector. Millions of Brits are languishing in fuel poverty and we must be a part of the solution to that.

“Smart meters will also be rolled out over the next few years, which will make customers more engaged than ever with the energy they are using because they can see the evidence right in front of them.”

Luke concluded: “I think that retail energy will remain big news over the coming years and we believe we are best placed to make a mark.”

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