Energy consumers shop around as 200,000 leave EDF energy

20 March 2019 Consultancy.uk

As rising utilities prices exert ever more pressure on consumers seeking the bare necessities of power and water, the UK’s market has often been slated by critics for forcing many consumers to “choose between heating and eating”. However, thanks to new disruptors improving the competition of the market, one of the UK’s largest energy suppliers has seen hundreds of thousands of empowered customers go elsewhere in the last year.

According to the recent Digital Vision for Energy and Utilities report by Atos, a combination of factors are making it more likely for consumers to switch between providers. Drives in the UK to make it easier to switch energy providers – as well as increased local energy generation and the proliferation of intelligent home devices – are disrupting the utilities market, providing new opportunities to create a nation of professional consumers.

By Atos’ reckoning, that would see digital disruptors seize a fifth of the UK utilities market by 2020. Supporting this, earlier in 2018, an Ofgem report found that the six largest suppliers of the UK energy market had seen their market share fall to 79% for electricity and 78% for gas in December 2017, down from 84% for both a year earlier.

Energy consumers shop around as 200,000 leave EDF energy

Now, a release from EDF Energy, one of the Big Six energy suppliers of Britain, has confirmed that the firm lost 200,000 customers over the course of 2018. Two large price hikes last year seem to have been enough to drive a large number of customers from the firm last year. Citing a "highly competitive" market, EDF also found that earnings for its UK business had tumbled by 16.5% to £691 million in the year to December 31.

Speaking to the Daily Mirror, Victoria Arrington of energyhelpline stated, “It’s no surprise that a major supplier had trouble keeping customers through the troublesome times of 2018. A loss of 200,000 customers may seem like a drop in the ocean compared to their 5 million or so total customers, but it shows that the energy market is experiencing tough times right now. Rising wholesale prices, as well as over 70 suppliers in the market competing for business, have made it difficult for the Big Six to keep hold of their grip on the market."

One in five UK domestic energy customers switched their provider in 2018 - an increase of 6% on the previous year, marking the highest number since records began. Of those who moved, 1.7 million customers switched to a small or mid-tier supplier. Following its fall of 200,000 customers, EDF Energy held 3 million residential electricity accounts and 1.9 million gas customers at the end of last year

Peter Earl, head of energy at comparethemarket.com, remarked, "December saw a switching surge away from the Big Six. Of the challengers, So Energy and Avro Energy emerged as the big winners."

Despite the rise in competition, though, EDF did benefit to an extent from customers feeling more empowered to change energy providers. Sales for 2018 came in at £7.9 billion, representing a rise of 3.9%; however, a price cap in the market is set to see its revenues fall further this year. EDF was forced to cut prices in January with the introduction of an energy sector price cap, and while regulator Ofgem has since increased the cap, EDF will only be able to raise its prices in line with that from 1 April – when they will rise by 10% for people on standard variable rate tariffs.


Profile

More news on

×