Ofwat predicts 40 retail licence applications this year

Ofwat said it expects as many as 40 applications from companies for retail supply licences in the coming financial year.

The regulator opened the application process for retailers to apply for water supply and sewerage licences (WSSLs). In its 2015/16 annual report, it said it expects about 30-40 applications for WSSLs in the coming year.

It insisted the market remains on track to open in April 2017.

Twelve companies have so far applied for licences since Ofwat opened the application process.

Thames Water Commercial Services is among those to have applied, but has since announced its intention to exit. Its business customers have been bought by Scottish retailer Castle Water, which has effectively nonupled in size as a result of the deal.

Castle Water had previously bought the business customer base of Portsmouth Water when the water-only company announced it would exit the market in January, and has subsequently applied for a licence.

Fellow Scottish retailers Business Stream, Cobalt Water and Clear Business Water have also submitted applications. Business Stream bought Southern Water’s business customer base when the large water and sewerage company announced its exit last month.

Northumbrian Water Business, Pennon Water Services, Severn Trent and United Utilities, Anglian Water Business, Sutton and East Surrey Water Services, Water 2 Business, and Kelda Retail – the business retail arm of Yorkshire Water – have also all applied for licences.

Other suppliers, including new entrant Everflow, have told Utility Week they are considering buying into the English market when it opens, and Veolia UK has also said it wants to grow its retail activities in the UK water market.