Ofgem recently published its annual “State of the Market” report, giving its assessment of how well the energy market is working for consumers in terms of competition, affordability, decarbonisation, and security of supply. In it, chief executive Dermot Nolan observed: “Energy markets are rapidly changing to meet our need for clean, secure and affordable energy and to accommodate a transformation in the way we consume energy. The pace and scale of changes are unlike anything we’ve ever seen in the sector.” As someone who has worked in the energy industry for a long time, I’d agree with him. Technologies are changing, as are consumer habits. I’ve always accepted politics and regulation will play a significant part in the energy sector and there is no doubt Britain’s energy supply market has been the subject of intense scrutiny f or a long time. All of these reasons are why we have a stated commitment to embrace change in each of our businesses, adapting them to the political, economic, social and technological requirements of customers and of society as a whole. Last week we announced plans to merge SSE’s household energy and services business in Great Britain with that of Npower to create, subject to regulatory approvals, a new, independent company to be listed on the stock exchange. Sunday’s edition of this newspaper asked whether the “lights” had “gone out on the Big Six”, suggesting that two of the largest household suppliers had effectively “thrown in the towel”. Incorrect. It’s true that the market has moved on considerably from the days of the so-called “Big Six” but this merger is about embracing change in the market, not running from it. There are now 60, not six, suppliers in a market in which competition is stronger than ever. Over half a million customers switched supplier in September alone with new entrants growing their market share from 1pc to more like 20pc in just a few years. So, this is not a case of six into five; it’s more like 60 into 59. And, as a result of this merger, one of those 59 will offer a completely new model that combines the resources of established players with the agility and innovation of an independent supplier.
Telegraph 15th Nov 2017 read more »