Supplier failures, Ofgem provisional orders, price caps and complaints about customer service levels have all hit the energy headlines since the start of 2019. But anyone expecting these developments to encourage customers to return to the Big Six will be disappointed.
The latest figures from our Domestic Market Share Survey for 31 January 2019 show that the six companies recorded another quarterly loss in their combined share of energy accounts. This holds true even when taking account of the transition of 190,000 Extra Energy accounts to Scottish Power through Ofgem’s Supplier of Last Resort (SoLR) process. Small and medium suppliers (SaMS) recorded collective growth in share of 0.6pp over the three-month period, to hold 27.3% energy account share.
Ovo Energy became the largest challenger brand after taking on the customers previously held by Economy Energy and Spark through two SoLR processes. Together Energy also recorded a high level of growth after adding the OneSelect customers, again after a SoLR. We estimate 1.1mn domestic energy accounts were reallocated through SoLR during the quarter to 31 January 2019. But there also continued to be organic growth for some SaMS, notably Octopus Energy and Bulb.
Brand name plays a large part in consumer decision making – price comparison websites report regular switches to large suppliers, especially when they are listed on the first page of the site. For example, in February, Compare the Market reported that just over 30% of its switches were to EDF Energy with the top four losing suppliers also from the Big Six.
The existing energy brands have been joined by a big new rival following the rebrand of First Utility to Shell Energy. Whilst First Utility had its own recognisable brand, Shell is a more widely recognised name than First Utility but also than most other energy suppliers, Shell has launched a competitively-priced fixed green tariff and loyalty programme to stake its claim. It will be firmly on the radar of all its rivals.
The latest developments in domestic energy competition feature highly in our upgraded training course on the GB retail market. The new agenda for the course, GB Energy Retail Competitive Landscape, addresses the key themes picked up in our ongoing research across the business and domestic supply markets, including:
- Supplier consolidation and the drivers of entry and exit
- Types of propositions and the price cap
- An overview of the smart metering obligation and the roll-out to date
- Supplier developments in the electric vehicle market