Competition investigation launched into sale of SSE’s retail business to energy upstart Ovo

Sale of Big Six supplier’s unit would turn Ovo into UK’s second-largest retail energy provider

Power surge: the deal could swell Ovo’s business (EPA)

An investigation has been launched into the planned sale of SSE’s retail energy business to Ovo, to ensure the deal will not reduce competition.

The sale, announced last month, would hand all of the Big Six supplier’s 3.5 million customers to Ovo, more than tripling its customer base and turning the relative upstart into Britain’s second-largest retail energy provider. Only British Gas would be larger.

Any interested party can comment on the proposed transaction until 6 November, the Competition and Markets Authority (CMA) watchdog said on Thursday.

Ovo, founded a decade ago, has consistently been rated the best energy supplier by comparison site uSwitch. It has sought to present itself as environmentally friendly and has invested in developing home battery technology to allow consumers to store energy generated from renewable sources.

The acquisition of SSE’s retail gas and electricity unit would follow another purchase by Ovo: last year it took over Spark Energy after the challenger supplier collapsed. That deal gave Ovo 290,000 new customers.

Competition in the retail energy market has soared over the past decade, reaching a peak of 70 suppliers in mid-2018, up from only 12 at the end of 2009.

However, a record number of companies went bust last year and more have failed this year. According to the latest figures from energy regulator Ofgem, by March the total number of gas and electricity suppliers declined to 60.

The latest casualty is Toto Energy, which ceased trading on Wednesday. Ofgem said it will choose a new supplier to take on all of Toto’s 134,000 domestic customers. Until then, their energy supply will continue.

Despite the greater competition – as well as the price cap for customers on prepayment meters introduced in April 2017 – more than one in 10 English households remain in fuel poverty, according to the latest government data, covering 2017.