The profits of the “big six” energy suppliers have fallen for the first time since 2014 as customers increasingly desert them in favour of smaller rivals, an official report shows.
The dominant players — British Gas, EDF Energy, E.ON, Npower, Scottish Power, and SSE — made a combined £900 million profit last year, down 10 per cent, said regulator Ofgem.
Meanwhile, the market share of the big six fell to a new low of 75 per cent, with a quarter of customers now opting to obtain their power and heating from smaller niche suppliers. There are now more than 70 licensed suppliers in total compared with 60 last year.
The big six — soon to be five after the planned merger of SSE and Npower’s retail businesses — have been criticised over recent years for steep price rises and allowing millions of customers to languish on expensive “default” variable tariffs. Switching to a cheaper deal can save more than £300 a year.
As of this April, 54 per cent of households were on these “poor value” deals, down from 57 per cent last year. Richard Neudegg of comparison site uSwitch.com said: “Consumers have woken up and smelt the savings that can be made by switching. We’re now tantalisingly close to a tipping point where the majority of customers will have moved away from poor-value standard tariffs, a major win for consumer power.”
Ofgem’s State of the Energy Market report also showed energy use continued its long-term decline, with average household consumption of gas down 5.5 per cent, and electricity 3.3 per cent lower — although March’s “Beast from the East” cold snap sent heating de-mand soaring to its highest since 2010.
Lawrence Slade, chief executive of Energy UK, which represents the major suppliers, said increased competition was “driving benefits for consumers”.
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