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.
Our interactive retail market indicators
Select from the below to view the indicators in detail and for an overview of our monitoring themes.
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In July, the average price of SVTs from the six large suppliers for a typical dual fuel customer paying by direct debit increased to £1,185, from £1,172 in the previous month. This was due to SSE’s SVT price increase taking effect. The market cheapest tariff also increased from £797 to £827. As a result, the differential between these tariffs decreased from £375 to £358.
In August, the price increases previously announced by E.ON and EDF took effect, while British Gas and ScottishPower also announced second price increases in 2018 for their SVT and Default Fixed Tariffs, taking effect in October. These changes will be covered in future monthly updates.
Between 2016 and 2017, profits earned by the six large suppliers continued to vary substantially, but showed a decrease in the average combined gas and electricity pre-tax domestic supply margin from 4.5% to 4.2%.
The dual fuel bill for an average domestic customer of the six large suppliers decreased between 2016 and 2017 from £1123 to £1117. This resulted from a reduction in wholesale and network costs in 201, partially offset by an increase in environmental/social costs and operating costs. See Prices and Profits.
Switching continues on an upward trend. The number of domestic switches in June 2018 was around 455,000 in electricity and around 389,000 in gas, 10% and 23% above their respective values in June 2017. The proportion of net switches away from the six large suppliers out of the total number of switches has also increased, from 23% in June 2017 to 48% in June 2018. See Switching and Consumer Experience.
The retail markets need effective competition between suppliers if they are to work in consumers’ interests. By monitoring the number of active suppliers we can see how many rivals suppliers compete with, while market shares help us understand the degree of competitive pressure that the different suppliers can exert on each other. Looked at over time, market shares reveal the competitive dynamics for existing suppliers. They also show the extent of new entrants’ success in building their businesses.
Competition in the energy market is necessary to incentivise suppliers to improve their cost efficiency. It should also push suppliers to improve their prices and services in the fear that if they do not, they will lose customers to their rivals and will struggle to attract new business.
Our indicators show trends across available tariff types and contracts, and the prices suppliers offer to different customer groups. Energy company profits help us to understand the strength of competition among companies. We assess this through the companies’ pre-tax margins, out of which they make a profit. We also look at the costs that make up a typical dual fuel customer bill over time to better understand what factors drive price changes.
Consumers promote effective competition by being actively engaged in managing their energy, and making a credible threat of switching where better offers are available. This pressures suppliers to innovate and offer better products and services for them.
We look at trends in external switching (between suppliers) and internal switching (with the same supplier) to understand levels of consumer engagement. We also look at average switching times, an indicator of process quality, and consider trends in overall consumer satisfaction with suppliers. These indicators are a snapshot of our more detailed consumer research on market engagement.
We have selected this range of indicators to support general understanding of the market, including how they contribute to the consumer outcomes outlined in our corporate strategy. 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.
These market indicators and data are not intended for use or to be relied on for any commercial purposes. View copyright and disclaimer