Competition in energy market is improving, says trade body
An independent report, commissioned by trade body Energy UK, argues that the energy market is changing and competition is improving. The publication comes as the energy regulator is expected to announce an inquiry into the sector.
It is anticipated that regulator Ofgem will recommend a formal inquiry into the competition and the grip the ‘big six’ utility providers have on the energy market in the coming days. Consumer group Which? and the Federation of Small Businesses have called for the “broken” market to be fixed in recent days.
However, the new report states that there are now more suppliers and smaller providers are gaining market share. In total, there are now 24 companies either supplying households with gas or electricity or both.
The major suppliers saw their aggregate shares of the household electricity, gas and dual fuel market fall to the lowest level in 15 years in the quarter to the end of January. Despite the improvement the ‘big six’ still account for the vast majority of the market.
Energy UK said, “Competition in the energy market is increasing and the pace of change is on the up. Around a 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 making up more of the market.”
Last month, Ofgen said that new measures would make the energy market fairer and more transparent, which would benefit consumers and independent suppliers. The regulator said it believed the measures would allow energy suppliers away from the ‘big six’ to trade fairly.
Following price hikes from the ‘big six’ at the end of last year, the number of energy customers switching providers hit a three-year high in December.
Energy UK added, “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 make it faster.”
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