LONDON (Reuters) - Britain’s small energy providers now have 13.4 percent of the country’s household energy supply market, up from just 2.6 percent two years ago, continuing their success in attracting disgruntled customers from their larger rivals.
Independent energy suppliers, such as First Utility and Ovo Energy, jointly gained 860,000 electricity and gas accounts, also called dual fuel, in the year to July 2015, latest market share data published by consultancy Cornwall Energy showed. Over the same period the ‘big six’ suppliers lost 660,000 accounts.
Britons have grown increasingly dissatisfied with poor customer service and high bills charged by the incumbent ‘big six’ suppliers, with the Competition and Markets Authority saying in July that it had found they had overcharged customers by around 1.2 billion pounds a year.
“Eventually customers who are on standard tariffs realise that they’re kind of getting ripped off and they look to the market and we’re out there with a great price, with a different message,” Ed Kamm, chief customer officer at First Utility, told Reuters, adding his company was focussed on engaging customers.
First Utility, which reported revenue of 561 million pounds last year, has doubled customer numbers in three of the last four years, adding 275,000 customers in the year to July 2015.
Britain’s big six suppliers — EDF Energy, RWE npower, Scottish Power, SSE, Centrica’s British Gas and E.ON — have dominated the market since liberalisation around the turn of the century.
Since then reforms have been introduced to attract more suppliers to the market to increase competition.
Former energy minister Ed Davey had said he wanted the market share of small suppliers to rise to 30 percent by the end of the decade. Today, the ‘big six’ suppliers still cover 86.6 percent of the domestic dual fuel market.
The loss of customers has already taken its toll on the ‘big six’ suppliers. RWE npower, which supplies around 10 percent of the energy retail market, said it had lost around 100,000 household customers between late 2014 and mid-2015, a fact that dragged on its parent company’s half-year results.
Jointly, the independent suppliers now hold the fourth-largest market share in the domestic market, behind British Gas, SSE and E.ON, Cornwall Energy data showed.
“Provided they can retain the customers they’ve got, the outlook looks set for the independent suppliers to continue growing,” Cornwall Energy director Robert Buckley told Reuters.
Editing by Greg Mahlich