Is the energy market no longer just about the Big Six?

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Mains-supplied natural gas is used to power the facilities of many businesses across the UK today, highlighting just how vital this fuel has become to the nation’s energy market. Of course, this popularity has also shown that demand for commercial gas continues to be high and is a market that is competitive and very busy.

However, this market has also long been dominated by six energy suppliers, these being Scottish Power, SSE, Npower, EON, EDF and British Gas. In fact, this sextet shares 80-90 per cent of the market at the moment.

Figures recently released appears to suggest that this majority share is beginning to fall though. Did you know, for instance, that 163,000 customers were reported to have ended their commitment with the Big Six energy suppliers to instead become a customer with a smaller supplier in September 2017? Or that in just the first three quarters of last year, 1.1 million customers left the Big Six firms?

Smaller suppliers have not only been able to capitalise on such a large number of people switching from the Big Six, but they have also been capable of expanding to the point that they can secure a tighter grip on the energy market as a whole. Could it be that we are not too far away from the market completely flipping on its head and the smaller firms becoming the new market leaders?

Before we get carried away with this idea, it’s important to note that it hasn’t been all good news for smaller energy suppliers in recent months — especially with the arrival of newly proposed energy legislation across the UK.

Prime Minister Theresa May introduced the legislation, in which a proposed cap on energy bills is planned for the nation’s energy market. The PM is confident that the move will help to repair a “broken market” once it’s rolled out — likely in late 2018 or early 2019. However, there are some industry experts who are concerned with the impact of the decision.

Robert Buckley, a Research Director at energy specialists Cornwall Insight, is wary that the legislation runs the risk of seeing consumers falling into a false sense of security where they believe it’s always the ‘safe’ option to stay with their current energy supplier instead of looking at the savings they could make by switching.

He underlines: “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.”
A number of small suppliers aren’t concerned though, believing that the tariffs they already have in place will be below any upper limit that is set through the proposed cap — making their services eye-catching to potential customers.

What is clear from this entire discussion is that businesses should be taking some time to research into switching their energy suppliers — and looking beyond just the Big Six in the process. Gas mains for businesses supplier Flogas Britain, for instance, has established themselves as a respected name in the energy market after more than 30 years of operating there. One of their most appealing unique selling points is that they offer highly competitive, fixed mains gas tariffs which have been found to save businesses up to 30 per cent on their annual energy bills.

Moving forward, can we expect more small energy suppliers to present increasingly attractive alternative offerings to entice businesses? The idea of more and more eye-catching offers could certainly get around the fears that firms will stick with the ‘safe’ option of remaining with their current energy supplier once the UK’s proposed energy bill cap is in place.