Smaller energy suppliers in the UK received a welcome boost as several of their rivals closed for business. As some smaller suppliers collapse, the surviving suppliers are absorbing their customers and experiencing significant growth as a result.
The numbers of displaced customers absorbed by surviving firms could even be enough for them to challenge the Big Six.
Ovo Energy Making Moves Towards Big Six
The largest beneficiary of the influx of available customers is Ovo Energy. They have absorbed around half a million of the customers previously contracted to suppliers that have since failed. The new customers have increased Ovo’s customer base to approximately 1.5 million. According to data from energy industry analysts Cornwall Insight, this has increased their overall market share to 4.9%.
The new market share figure leaves them only 2.8% behind Npower, an established Big Six supplier. However, Npower are to be absorbed themselves soon by another of the Big Six, E.ON.
Npower’s failed merger attempt with SSE last year would have turned the Big Six into a Big Five. Their imminent ownership transfer to E.ON will make that happen instead. How close to the new ‘Big Five’ that leaves Ovo Energy remains to be seen.
Energy Suppliers Going Out of Business
Last year saw something of a cull of small energy suppliers with a total of eight going out of business. Those lost in 2018 include Usio, Future, National Gas and Power, Iresa, Gen4U, One Select and Spark Energy. Their closures were primarily blamed on the rising costs of wholesale energy.
The worrying trend of collapsing suppliers actually inspired the Government to increase licensing regulations for new energy supplying companies. The new regulations will eventually insist new suppliers are pre-emptively capable of ‘weathering the storm’ of wholesale price rises.
The closures are not limited to last year either, as 2019 has witnessed the collapse of two smaller suppliers already. Economy Energy closed for business early in January, and they have recently been joined by Our Power Energy. The latter is particularly disheartening as it was a not-for-profit supplier focused on providing energy to the social housing sector. Their primary aim was to tackle fuel poverty in the UK, but they officially ceased trading on January 25th.
Customers Need Not Worry About Supplier Closures
Industry regulator Ofgem has procedures in place to protect customers whose energy supplier goes out of business. The Ofgem safety net ensures customers do not lose access to power. They remain connected and will be set up with a new supplier within days of the original supplier’s closure.
Customers can then request the new supplier places them on the cheapest suitable tariff. Alternatively they can shop around themselves and find a new supplier offering a more favourable rate.
To learn more about different energy suppliers and rates available for you or your business, contact Business Save and their team of highly experienced energy experts.