ScottishPower said today it is joining forces with construction company Alfred McAlpine to set up a UK-wide business to compete in the emerging UK market for gas and electricity connections which will be worth around £1 billion ($1.43 million) a year when fully opened up to competition.
The 50-50 joint venture – still to be named – will begin trading in November. ScottishPower expects the new venture to offset the doorstep business they will lose over the next few years as the connections market – among the last of the energy industry monopolies – is further opened up to competition later this year by the energy regulator, Ofgem, in line with proposals published last month.
Joining with a private contractor is a unique response within the electricity industry said ScottishPower. It will allow ScottishPower and its subsidiary, Manweb, to compete for contracts outside their home areas of central and southern Scotland and Merseyside and North Wales by using the UK-wide network of depots operated by McAlpine’s recent acquisition, the Kennedy Utility Management Group, one of the country’s largest providers of multi-utility services.
The plans were announced this week to the around 500 staff from ScottishPower and McAlpine who will be transferring to the AEEU-backed joint venture, which will focus on the higher value end of the market – mainly complex industrial and commercial work and on multi-utility connections. This already accounts for some 25 000 ScottishPower transactions each year.
The business will have around 40 depots, including in Motherwell and Liverpool.
Bill McClymont, managing director designate of the joint venture said, “Standing still is not an option for us. McAlpine are bringing their own skill and commercial experience, as well as their UK-wide presence and reputation, to our traditional strengths in design and customer management. They will also provide access to new markets, including services to roads and street lighting”.