Commercial Gas & Electricity Suppliers

How is The Market Structured?

The so-called “Big Six” companies dominate energy supplies to homes and businesses across all regions of the UK. All providers are regulated by the Ofgem code of conduct to ensure they switch customers promptly and charge rates according to contract terms.

The independent players such as Opus, CNG and First Utility all offer competitive pricing structures often beating the market leaders. All buy fuel on the open wholesale market and add in transmission costs using the same infrastructure already in place. Therefore, no matter which energy supplier you choose, there are no changes to the pipes and cables connecting your property to the National Grid network.

Which Provider is Best for You?

The SME business category is the most substantial commercial sector with 4.1million sites and meters. The 120,000 industrial and half hourly segment is the largest by usage volume.

Small and Micro Businesses

Internal objectives for most suppliers is to target an improving market share by volume of customers. This growth strategy benefits business owners with the lowest consumption because pricing in this sector is typically competitive.

Use the following checklist when considering your options.

  • Investigate unit costs per kWh and daily standing charges for the entire market.
  • Consider the duration of contracts available against any risks associated with fixing rates over the long-term.
  • Understand the ease of switching and any cancellation penalties for early termination.
  • Decide if you require the installation of a smart meter to provide accurate billing information.

Although a price alone may be the deciding factor, wholesale market trends should be taken into account when deciding the length of your agreement. Most standard meters begin with the numbers 01, 02, 03 or 04 with so-called “max demand” classes starting with 05, 06, 07 or 08.

High Consumption Users

The tendering process for 00-class meters requires specialist knowledge, techniques and procedures for effective procurement. Although you can get pricing quotes in the same manner as the SME market, the more competitive rates only exist if you undertake a full tendering process. Read more about half hourly meters here.

The Main UK Electricity and Gas Suppliers

The table below shows the key energy suppliers for UK commercial customers.

Company Description
British Gas British Gas is the industry leader providing energy to over 1 million UK businesses. Owned by Centrica, they guarantee to beat any renewal quote.
E.on E.on Energy UK, formally known as PowerGen, is the largest global shareholder-owned utility company serving over 26 million customers and now own Innogy.
Npower Npower is part of the German-owned group RWE. It supplies residential and business customers directly including the Utility Warehouse Group.
ScottishPower ScottishPower is a subsidiary of the Spanish utility company Iberdrola. Although based in Scotland, it supplies the whole of the UK.
Opus Energy Opus is a specialist operator in the UK with over 130,000 business customers. Each new contract receives the installation of a free smart meter.
SSE SSE is the parent company for Scottish Hydro, Southern Electric, Airtricity and SWALEC. They’re the 2nd largest company after Centrica.
EDF Owned by Electricite de France, EDF and British Energy are the largest electricity producer in the UK supplying over 5,500,000 properties.
Total Gas and Power The French Total own Total Gas and Power. TGP is the largest UK industrial gas supplier with over 75,000 UK customers.
Dual Energy Dual Energy is a B2B focused organisation that provide new smart meters for each new customer. 98% of their customers renew their annual contracts.
Gazprom Gazprom supplies over 11,000 UK businesses and with gas supplies equating to a 10% market share. Their UK operations began in 2006.
CNG Contract Natural Gas (CNG) are the largest privately owned gas company in the UK and began operations in 1994.

 

Big Six Versus Independent Suppliers

Most buyers choose one of the well-known branded operators for their power source, but numerous other options are available. The current trend in the residential sector is moving away from the Big Six suppliers in favour of the independent companies. The latest market share data from Ofgem shows the trend in more detail.

Market Share Trends

The trend towards the smaller operators began in 2013 where just 2% of customers trusted for their electricity supply. Today it’s 20% as the graph below illustrates.

Year Big Six Others
2013 98% 2%
2014 92% 8%
2015 88% 12%
2016 84% 14%
2017 80% 20%

 

The regulator protects you against any loss of supply during the switching of contracts and ensures billing is accurate and switching takes place correctly. Bear in mind that not all the operators service all regions of the UK or provide all types of fuel. Some are purely gas suppliers while others only supply electricity.

Most providers now install Smart Meters with the added benefits of data analysis. Check the terms and conditions of any Smart Meter installation as not all work with every supplier and you may have trouble switching to a different supplier next time.