Once upon a time in 2014…
Ofgem, the government regulator for the gas and electricity markets in the UK, announced that it was investigating the Big Six energy companies (British Gas, SSE, Scottish Power, Npower, E.On and EDF) for profiteering.
Ultimately, the eighteen-month investigation found that the Big Six were overcharging £1.7bn a year, roughly £234 a year per household, but Ofgem bowed to pressure from the Big Six and placed the blame on consumers.
Rather than punishing the companies, only minor changes were suggested, causing a wave of criticism. In the end, it was seen as a bit of a pointless exercise.
It was not a pointless exercise for independent Energy companies though, as the opportunist ventures capitalised on the distrust in the market to provide a viable alternative. In 2009, many independent energy companies entered the market, vying to be the leader amongst their group.
The Rise of the Independents
In 2009 the independents held just 0.2% of the market, and by 2010 it was still less than 1%, but it has slowly grown, and is now estimated to be between 13% and 15%.
First Utility were the first major independent energy company, with 550,000 customers by the end of 2014, before Utility Warehouse, part of Telecom Plus, became the biggest independent energy company in the UK in December 2014, purchasing 770,000 customers from Npower for £218 million.
Since then, First Utility have grown faster, and are now the largest independent energy company again.
Independent Energy Company List
- Extra Energy
- Ecotricity
- Economy Energy
- Ebico
- Daligas
- Co-operative Energy
- Budget Energy
- Better Energy
- Airtricity
- Firmus Energy
- First Utility
- Flow Energy
- GB Energy
- GnERGY
- Good Energy
- Green Energy UK
- Green Star Energy
- iSupply Energy
- LoCO2
- M & S Energy
- OVO Energy
- Power NI
- Spark Energy
- Swalec
- Utilita
- Utility Warehouse
- Woodland Trust Energy
- Zog Energy
Independent energy company ‘big business’ list
The six largest independents are below, showing that First Utility have returned to be recognised as the largest independent energy company, marginally ahead of Utility Warehouse and OVO.
- Co-operative Energy 1%
- Extra Energy 1%
- First Utility 3%
- OVO 2%
- Utilita 1%
- Utility Warehouse 2%
- Others 4%
How does an independent energy company take a customer from a giant?
With excellent customer service, cheaper prices and supporting renewable energy, that’s how. Trends suggest that independents do offer the cheapest energy deals on average, with the gap between the average Big Six price and the cheapest market offer being around £329.
Scottish Power and Npower have customer satisfaction rates of around 60%, whereas the best independents are rated closer to 80%. More than 70% of the customers of the Big Six are on their most expensive tariff, with most being completely unaware that they are overpaying for their heating.
What the independents also do is pass on wholesale cost decreases, such as when the fuel market is cheaper and they get an especially good deal.
Bossing the business share
What you may be surprised to discover is that more than 80% of the business energy market share is supplied by independent energy companies. Commercial clients are happy to pay lower prices with better customer service, as is natural.
Remember, the market figure is less than 15% for household gas and electric, so this really is astonishing.
A remarkable rise
The rise of the independent energy company has several byproducts, such as energy price comparison websites, like ourselves, ‘flipping’ communities who advise regular changing provider or tariff to get the best deal, and many synonymous terms, like ‘switch & save’.
The rise of the independent energy company has coincided with an emerging transparency in the market, revealing the distrustful tactics of the Big Six, and the opportunity to build trust with millions of people who desperately deserved an alternative.
Typical environmentally friendly energy alternatives include both wind and solar power, as well as not-for-profit energy which contributes to social causes and charities.
Despite the risks, the challenge of tackling billionaire owned organisations and the struggle to win customers before collapsing in on themselves, the market has successfully been disrupted by a band of plucky independents. It’s been a remarkable rise.
