The domestic energy market is facing its biggest shake-up in decades as disruptor companies are making major inroads into the dominance of the Big Six giants. Today First Utility will reveal that it has become the first independent company to sign up a million accounts.
In the last three years the share of the market held by the energy giants – British Gas, EDF, E.On, nPower, Scottish Power and SSE – has fallen from 99 per cent to 92 per cent, according to the energy strategists Cornwall Energy. The latest data revealed that more people switched to independent firms than the Big Six in May, the first time the challengers have achieved that.
The new players are celebrating their differences from the profit-hungry global giants by stressing their green credentials or community involvement, as well as offering better-value prices and easier-to-understand tariffs.
First Utility, which now has 2 per cent of the market with 550,000 customers (many taking both gas and electricity), has promised to celebrate its million account milestone by pledging 1 per cent of its profits to charity.
The First Utility Foundation will be seed-funded by a £100,000 donation from the firm and will work on projects aimed at supporting vulnerable people in the UK.
Ian McCaig, chief executive, said: “Our success proves how much of a shake-up was necessary in the market. We have consistently campaigned for a fairer, more transparent UK energy industry, but much more needs to be done, and now.”
The landmark was lauded by the Energy Secretary, Ed Davey, who said the Government has been working to open up the energy market and break the stranglehold of the Big Six. “The number of energy suppliers has almost trebled since 2010 and with more than two million customers now signed up to independent suppliers overall, it’s clear that households increasingly trust them and are benefiting from competition in the market,” he said.
Energy UK, the body that represents the energy industry, said that more than 225,000 households are switching suppliers each month. With savings often amounting to hundreds of pounds, switching is the number one way to cut the UK’s domestic energy bill.
“The energy market is starting to work for consumers,” said Steve Weller, chief executive of the comparison site uSwitch. “More and more people are voting with their feet and switching away from the Big Six to newer providers, chasing lower prices and better service. The Big Six need to raise their game if they want to keep customers.”