Competition in UK energy market is increasing


Energy UKAn independent report for Energy UK – the trade association whose members include the ‘Big Six’ utility companies, among others – reveals that competition is not only increasing, but gathering speed with more and more companies supplying gas and electricity to homes and businesses.  

Medium and smaller suppliers now account for a higher market share of the household electricity, gas and dual markets and levels are now the highest they have ever been since competition started in the late 1990s.  Other key findings include;

  •  Suppliers in the household market:  a total of 24 companies are either supplying householders with gas or electricity or both. That is 18 dual fuel energy suppliers, three electricity only suppliers and three gas only suppliers to households; 
  • Dual fuel:  12 companies are competing with the 6 major suppliers to supply households with dual fuel energy up from 6 three years ago;
  • Increasing competition: nearly a third of all gas and electricity licence applications applied for and awarded in the three years up to 31 October 2013 occurred in the final six months of that period; 
  • Market share: the aggregate shares of the household electricity, gas and dual fuel supply markets held by the major suppliers all dropped below 95% in the quarter to 31 January 2014, the lowest levels seen in the 15 years of the competitive markets; and 
  • Market concentration: is declining on a Great Britain-wide and region-specific basis, falling particularly sharply in the most recent quarter. This suggests increasing competition. There also appears to be a relationship between the availability of gas indicating that access to gas is an important factor affecting concentration in the market;
  • Business/ household customers: businesses use 70 per cent more electricity than households. Household consumption of gas is 40 per cent more than for business; 
  • Gas: 8.5 in 10 households can access gas. Most buy their energy on dual fuel contracts. Access to gas is below average UK levels in northern Scotland and south west England.

 A spokesman for Energy UK said: “Competition in the energy market is increasing and the pace of change is on the up. Around quarter of a million shop around for a new energy deal every month and they now have many more suppliers to choose from. Since the 1990s the number of suppliers has increased four-fold with smaller and medium sized companies now making up more of the market.

“It pays to shop around for an energy supplier and deal that suits your own circumstances best. Switching is easy and the industry is working to making it faster.”

A full copy of the report can be downloaded on the Energy UK website 

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