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Friday, September 19, 2014

Britain's big six energy suppliers continuing to lose market share

By Debbie Faulkner

New figures show that Britain’s ‘big six’ energy companies – British Gas, EDF, E.ON, npower, Scottish Power and SSE – are continuing to lose their market share. The large suppliers now have a 92.4% share of the market – a decrease from 99.8% five years ago.
The latest figures, from independent research group Cornwall Energy, show that 3.8m customers have accounts with small, independent suppliers. These energy companies have increased their share from 0.2% to 7.6% at the same time as the big six have taken a tumble.
big six energy suppliers
Independent energy suppliers are differentiating themselves as Earth friendly

Britain’s largest independent energy company, First Utility, has just announced it has reached over a million customer accounts and now has a share in more than 2% of the residential energy market. The utility supplier has seen a remarkable ten-fold increase in customer numbers in just under three years. Utility Warehouse is the second biggest independent supplier, with some 835,000 accounts.

Independents are differentiating themselves from the big six by underscoring their green credentials, technological advances, or market campaigns as well as offering some of the cheapest gas and electricity tariffs.

First Utility is just one of the smaller firms claiming to offer cheaper bills than those of the big six suppliers. The firm has been the cheapest gas and electricity supplier on the market for 23 out of 35 weeks in the third quarter of 2014, promising to save customers up to £213 a year. Co-operative Energy and Extra Energy also offered gas and electricity tariffs under £1,000 in Q3.

“The number of energy suppliers has almost trebled since 2010 thanks to Government action to open up the energy market and break up the stranglehold of the big six” says Ed Davey, Secretary of State for Energy and Climate Change.

“Reaching one million customer accounts is a fantastic milestone for First Utility. With over two million customers now signed up to independent suppliers overall it’s clear that households increasingly trust them and are benefiting from competition in the market.”

The latest data reveals that more people switched their gas and electricity supply to independent firms than the Big Six in May for the very first time. The news comes after the big six suppliers announced above-inflation price rises in unison and met an increase in customer complaints.

Representing the energy market, Energy UK said more than 225,000 households are switching suppliers each month. The figures indicate consumers are now more willing to switch and are more aware of the benefits of switching.

 “More and more people are voting with their feet and switching away from the Big Six to newer providers, chasing lower prices and better service. The Big Six need to raise their game if they want to keep customers,” says USwitch chief executive Steve Weller.

The declining market share comes in unison with an enquiry into the big six suppliers by the Competition and Markets Authority (CMA) after regulator Ofgem said the market did not allow fair competition.

The CMA enquiry, which is to examine the possibility of breaking up the big suppliers, is due at the end of next year.

About the author: Debbie Faulkner is an energy blogger who champions green energy and campaigns against the monopolisation of the ‘big six’ energy companies.

Image: Alan Cleaver, "Electric light", CC BY 2.0