Retail highlights June 2021
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 Q4 2020, the number of active licensed suppliers in the domestic retail market fell from 55 to 52 in the previous quarter. Three suppliers exited the market and no new suppliers entered in this period.
The market share of the large legacy suppliers stood at 70%, while other large, medium and small suppliers accounted for the remaining 30%, in both domestic electricity and gas markets. These overall market shares were unchanged compared to Q3 2020.
For our classification of suppliers by size see the ‘More information tab’ of the market share indicators.
Prices and profits
As of May 2021, the average price of SVTs with large legacy suppliers for a typical dual fuel customer paying with direct debit fell by £7, from £1,138 to £1,131 compared to the previous month. The reduction reflects new cheaper SVTs by Nabuh Energy and Ebico, which are currently white label brands fully owned by British Gas.
The price of the cheapest tariff basket increased by £21, from £921 in April 2021 to £942 in May 2021, reflecting the upward trend in wholesale prices.
As a result, the differential between the average price of SVTs for the large legacy suppliers and the cheapest tariff basket fell from £217 to £190.
The cheapest standard credit tariff among the large legacy suppliers was unchanged at £1,153, while the cheapest prepayment tariff reached the same price, up £25 from £1,129 in April 2021. Across the whole market, the cheapest standard credit tariff continued to be the same price (£859) as the cheapest direct debit tariff, and £118 less than the cheapest prepayment tariff.
The weighted average price of SVTs for a dual fuel prepayment fell by £23 to £1,130, due to the new tariffs issued by Nabuh Energy and Ebico. This is £26 below the summer prepayment cap level of £1,156. For the same period the cheapest prepayment tariff was £977, down by £9 from the previous month. As a result, the differential between the average SVT and the cheapest prepayment tariff dropped from £168 to £153.
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.
After the spikes in February and March 2021, the number of switches decreased by 3.7% in April 2021 compared to March 2021. Nonetheless, it remains relatively high, possibly under the influence of suppliers’ price increases after the entry into effect of the summer price cap levels on 1 April 2021.
In electricity, switches decreased from 593,570 to 551,688 but there was a slight increase in gas switches from 391,608 to 397,121. These figures were also significantly higher than the number of switches seen in April 2020, with switching for both fuels increasing by 24%.
In April 2021, the proportion of net gains in switching away from the large legacy suppliers was 36% of total switches for gas and electricity combined, down from 37% in March 2021.
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.