Are the Big Six Energy companies losing their place on the market?

There are 80% of the UK’s household (not to mention figures from businesses) receiving mains-supplied natural gas. It’s an integral fuel to the UK’s energy mix. The competitive market is continuing to be high, for both domestic and commercial mains gas.

What are the Big Six?

The Big Six is essentially the 6 larger energy suppliers that make up most share of this market (c.80 – 90%) and are: British Gas, EON, Npower, SSE, Scottish Power and EDF.

The Energy Market Change

There have been recent figures that have suggested that popularity of these energy supplier giants may be fading among UK energy users. The has been a record of 163,000 customers who have reportedly left the Big Six in favour of smaller suppliers in September 2017 alone.

This movement appeared around the same time as British Gas prices that were raised by 12.5% within the same month. Fortunately, the rise of their prices has helped the company and its five main competitors maintain a healthy profit margin, despite the big loss of costumers.

Even though the profits are what’s protecting them for now, the impact of the Big Six’s fall from grace is manifesting itself in a noticeable market shift: a shift that’s signalled its monopoly could possibly be set to shrink irreversibly. To summarise, it was reported that 1.1 million customers had switched away from the Big Six in the first three quarters of 2017, which had risen to 18% in comparison to the same period the previous year. This trend has allowed smaller competitors to grow their market share to extraordinary levels.

If this continues at a similar rate throughout 2018 and not only will the smaller suppliers continue to grow but they are likely to continue to tighten their grip on the market along with new, dynamic challengers that are emerging all the time.

The flipside

Although 2017 was a promising year for energy switching, some experts had voiced concerns that new proposed energy legislation could put paid this trend. 

The Prime Minister Theresa May had announced plans to fix what she has classed as a ‘broken market’ by introducing a proposed cap on energy bills. This will likely take effect in the later and or possibly 2019, and this could last 5 years. Even though it may sound like good news for consumers, Robert Buckley who is a research director at energy expert Cornwall Insight is among those who have doubts.

He predicts that the price cap could lead consumers into a false sense of security, making them believe it’s ‘safe’ to stick with their current supplier and slowing down the switching trend. He said: I think there’s a real risk with any price cap that people who haven’t engaged with the market think that they’ll be OK not to.”

Saying that, several of the smaller suppliers have welcomed the prospect of the cap, as their existing tariffs are already will below any upper limit likely to be set.

One respected supplier, Flogas Britain who have 30 years’ experience in the energy industry. Along with providing bespoke off-grid energy solutions, it specialises in gas mains for businesses too.

Despite the fact that Flogas prides itself on its highly competitive, fixed main gas tariffs- which can saves businesses switching to the company as much a 30% per year on bills – it offer customers more than that. They understand the challenges of running a business, and therefore understand what commercial customers are looking for in an energy supplier and have built a package around that to make business owners’ lives easier, as well as their supply more affordable energy.

What does the future hold for the energy market?

With various factors to play, it’s difficult to predict the future lay out of the land for the energy market. Two things are for sure, though: The first thing, consumers are starting to realise that their options aren’t limited to the Big Six, and second, smaller suppliers are responding with increasingly attractive alternative offerings.