Since the energy market’s deregulation in the 1990’s the Big Six have remained firmly in power as the six largest energy suppliers to the UK. While the Big Six (Npower, EON, SSE, Scottish Power, British Gas and EDF) enjoy the lion’s share of the residential and business market in the UK there has been some unrest amongst consumers.
Recent news reports that OFGEM are pushing the Big Six to open their accounts in a bid to encourage financial transparency. An investigation has also begun to check whether the business gas and electricity kings have been playing fair and passing discounts on to their customers after wholesale prices dropped this summer. In light of these recent events it is easy to understand why many are looking for alternative ways to source their energy supplies.
The Energy Company Revolution
In what some are calling an energy revolution a number of councils and social housing landlords are looking into collaborating with likeminded groups and individuals in order to set up their own energy firms. Local authorities across Britain, including many in Nottingham, Bristol, London, Plymouth and Berwickshire are looking to set themselves up as supplier and promises their local residents and business users that they will significantly undercut the Big Six while doing so.
These Small Independent Suppliers are Not Far Away
The progress many groups have made already shows the level of disappointment and discontent that consumers feel about the larger companies. In Scotland eight housing associations and a charity who work on renewal energy sources have banded together to create a consortium of sorts who are currently only small steps away from signing a financing deal which will set themselves up as suppliers.
Recently in Plymouth Ovo, the independent energy supplier signed an agreement with the local council enabling them to become the first city to supply thousands of energy customers themselves.
Many smaller independent companies are being formed, all looking to take their energy supply into their own hands.
The Financial Implications
While the larger companies are able to offer discounts based on bulk buying and a range of other business ways and means these new smaller companies and independent suppliers claim to be able to undercut their giant industry neighbours. One estimate suggests that as much as £100 per year could be saved on a household whose annual spend is approximately £1300.
Supplying smaller areas and dealing with local supply as opposed to widespread national customer bases these new supply companies will likely be exempt from some of the levies and taxes that larger corporations are privy to. This could be just one way that ensures their supply costs consumers less.
It is clear to see that the way that the energy market in the UK is run is changing. The future of business and residential energy could indeed be very different to what it is now if more and more breakaway groups form.