Retail market indicators

Retail highlights July 2022

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

If you have feedback on the indicators, please contact us.

Market structure

In Q1 2022 the number of exits from the domestic retail market reduced significantly compared to the previous quarter. The number of active licensed suppliers fell to 24 from 26 in the previous quarter. This was due to two exits and no entries.

The combined market share of the large legacy suppliers continued to increase. It was up by one percentage point in both fuels, reaching 72% in gas and electricity markets (the increase mainly reflects the appointment of British Gas as supplier of last resort for Together Energy which ceased to trade in January 2022). The other large, medium and small suppliers accounted for the remaining 28% market share, 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 June 2022 the wholesale market continued to experience high volatility following Russia’s invasion of Ukraine and a series of unplanned outages that limited the delivery of LNG supplies and Norwegian pipeline gas to Great Britain. As a result, fixed tariff prices, not protected under the price cap, have continued to fluctuate significantly. The average fixed tariff price was £3,062, up by £24 from £3,038 in May 2022.

The average price of SVTs with large legacy suppliers for a typical dual fuel customer paying with direct debit remained at £1,970, coinciding with the summer price cap level. The cheapest tariff basket was also unchanged at £1,959. As a result, the differential between the average price of SVTs for the large legacy suppliers and the cheapest tariff basket remained at £11. 

With SVTs generally representing the cheapest tariffs in the current market crisis conditions, most customers have tended to move to or remain on these tariffs instead of choosing more expensive fixed deals. As of April 2022, the overall proportion of domestic customer accounts on default tariffs with large and medium suppliers, not paying via the prepayment payment method, was 68% in electricity and 66% in gas, an increase of around eleven percentage points compared to the last update in October 2021 (these figures exclude Bulb’s customer accounts and may not include all customer accounts that some suppliers have acquired as a result of the Supply of Last Resort processes that happened between August 2021 and March 2022).  

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.

Switching

In May 2022, the total number of switches was down 6% relative to April 2022 and 83% below the level observed in May 2021. The number of electricity switches fell from 67,070 to 63,003, while gas switches fell from 45,841 to 42,721. These were the lowest levels on record since we started monitoring this indicator. 

The proportion of net gains switching away from the large legacy supplier was around 26%, compared to 31% in May 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.