Retail highlights August 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 Q1 2021, the number of active licensed suppliers in the domestic retail market fell from 52 to 49 in the previous quarter. Four suppliers exited the market and one supplier 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 the previous quarter.
For our classification of suppliers by size see the ‘more information’ tab of the market share indicators.
Prices and profits
As of July 2021, the average price of SVTs with large legacy suppliers for a typical dual fuel customer paying with direct debit remained at £1,138, unchanged from the previous month.
The price of the cheapest tariff basket increased by £47, from £968 in June 2021 to £1,015 in July 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 £169 to £123.
In 2020 the combined gas and electricity pre-tax domestic supply margin for the large legacy suppliers remained negative, but less so than in 2019. Centrica was the only supplier making a positive margin, dropping from 2% to 1.75%. E.ON’s position, which in 2020 includes npower, also worsened, with its negative margin going from -1.3% to -2.2%. EDF recorded an improvement, reducing its negative margin from -6.1% to -4%. Scottish Power was relatively stable at -2.1%, compared to -2% in 2019. The 2020 data is not available for OVO/SSE. OVO does not hold any generation licence and is not legally required to submit a Consolidated Segmental Statement.
Following the high levels reached in March and April, the number of switches decreased by 33% in May 2021 compared to the previous month. June 2021 saw a slight increase (7%) compared with May, but switching was still at its lowest level for the month of June since 2016.
Switches increased from 375,097 to 397,816 in electricity and from 260,267 to 283,099 in gas. These figures were also significantly lower than in June 2020, at the time of the first lockdown, with switching dropping by 14% and 17% for electricity and gas respectively.
In June 2021, the proportion of net gains in switching away from the large legacy suppliers was 25% of total switches for gas and electricity combined, down from 31% in May 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.