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.
Retail highlights at July 2017
- The number of active suppliers in the domestic retail market increased to 54 at the end of March, from 52 in December 2016. At the same time the joint market share for the six large suppliers dropped 1 percentage point to 82% in gas and 83% in electricity, the joint market share for small suppliers increased by one percentage point to 6% in both fuels, while the share for medium suppliers remained relatively stable around 12% in gas and 11% in electricity. See Market structure.
- The average price of standard variable tariffs (SVT) offered by the six large suppliers increased throughout March and June 2017, reaching £1,142. As a result, the differential between the average price of the SVT offered by the six large suppliers and the cheapest tariff in the market increased to £290 in June. See Prices and profits.
- After the introduction of the prepayment price cap, the market average (SVT) for a prepayment customer with typical energy use on a dual fuel tariff fell by around £70. As a result of this reduction and the price increases on other payment methods, the market average direct debit SVT was around £66 more expensive than the average SVT for a prepayment customer as of 28 June. See prices and profits.
- Electricity switching fell slightly between April and May 2017 to 414,000 switches. However, this was the highest level of electricity switching in the month of May since 2008. Gas switching was also high, at 305,000, the highest level of gas switching in the month of May since 2009. The number of switches to medium and small suppliers remains high. Net switching gains for small and medium suppliers were around 124,000 and 99,000 for electricity and gas respectively. This is a fall of around 20,000 from the previous month for each fuel and is in line with the seasonal drop in overall switching levels. See Switching and consumer experience.
Our interactive retail market indicators
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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