Retail highlights February 2023
In our monitoring of the retail energy market for gas and electricity, we collect and analyse a vast range of data. Our retail market indicators give a snapshot of this monitoring. They draw from a comprehensive framework which underpins our ongoing monitoring, including our annual update on the retail energy markets in Great Britain. You can view these updates in the related publications section below.
These market indicators and data are not intended for use or to be relied on for any commercial purposes. View copyright and disclaimer
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In Q3 2022 the number of active licensed suppliers dropped by one to 23. This was due to one exit and no entries.
The combined market share of the large legacy suppliers fell by 1% to 71% in gas and remained at 72% in electricity. Other large, medium and small suppliers accounted for the remaining 29% and 28% market shares respectively, including Octopus with a share of 11%.
For our classification of suppliers by size see the ‘information tab’ of the market share indicators.
Prices and profits
In January 2023 wholesale market prices fell compared to the previous month, but continued to experience significant volatility.
After the entry into effect of the Government’s Energy Price Guarantee (EPG) on 1st October, suppliers are expected to change their tariff prices in compliance with the EPG. While variable tariffs have generally remained on offer with prices adjusted towards the EPG levels, suppliers have withdrawn fixed tariffs from sale to new customers and adjusted prices only for existing (but not for sale) fixed tariffs. As a result, there is still no available update on the average price of fixed tariffs in the market this month.
The average price of SVTs with large legacy suppliers for a typical dual fuel customer paying with direct debit remained at £2,500, coinciding with the Energy Price Guarantee. The cheapest tariff in the market remained at £2,375 in January 2023. The cheapest tariff basket was also unchanged at £2,482. As a result, the differential between the average price of SVTs for the large legacy suppliers and the cheapest tariff basket was unchanged at £18.
From 14 April 2022, we have required suppliers to pay a Market Stabilisation Charge when acquiring new customers. The market stabilisation charge will only apply in certain market conditions (that would otherwise create risks to market stability), which we will assess on a weekly basis. You can find out if the Market Stabilisation Charge has been triggered, and if so what the level of the charge is on our website at: Market Stabilisation Charge dashboard.
In December 2022, the total number of switches was down 1% relative to November 2022, and remained 34% below the level observed in December 2021. The number of electricity switches increased from 78,972 to 79,377, while gas switches decreased from 49,144 to 47,864. The annual domestic switching rate for 2022 reached a historic low of 3% in electricity and 2% in gas.
The proportion of net gains switching away from the large legacy supplier was around 22%, compared to -1% in December 2021, mainly reflecting customers’ movements towards other large and medium suppliers.
Methodology and sources
We have selected this range of indicators to support general understanding of the market, including how they contribute to the key priorities outlined in our strategic narrative. We also aim to provide a picture of the market where it is not produced elsewhere, or where there is scope for us to set a clear methodology for the data.
Our data comes from sources that are either publicly available, provided by third parties or from responses to Ofgem information requests. Specific sources and relevant dates are listed with each indicator. We are grateful to third parties for allowing us to reproduce their data.
Most of these indicators will be updated quarterly while still allowing access to historic information. Updates will depend on the availability of data for an indicator.
We will review the indicators periodically to ensure they continue to help promote transparency and understanding of the retail energy market and as additional sources of information become available.