New gas and electric firms vying for market share

19 March 2010 16:39:38

Smaller energy suppliers are taking on the 'big six'.

Anyone who has taken the time to compare energy prices will have noticed that the market is currently dominated by the so-called 'big six' suppliers, namely British Gas, EDF Energy, E.ON, npower, ScottishPower and Scottish and Southern Energy. However, the last few years have seen a rise in the number of smaller players, all of whom are vying for customers' money and are increasingly chipping away at the larger providers' dominance. So who are these smaller rivals?

First Utility

First Utility launched in September 2008 and describes itself as "an energy company with a difference". The company claims to offer a "genuine alternative to the poor service and lack of competitiveness" that it believes exists in the gas and electric market. Potential customers should not be deterred by the company's perceived lack of experience, as it previously traded under the name First Telecom since 1994. First Utility prides itself on offering transparent pricing, accurate billing and innovative smart meter technology.

Ovo

Another young competitor is Ovo, which launched in September 2009 and promises to "do what we say and not make commitments we can't keep". The Gloucestershire-based company has a long-term goal to supply all of its customers with 100% renewable energy and currently offers a renewable tariff for those with an environmental conscience. Shortly after its launch, Ovo cut its dual fuel standard tariff, making it the cheapest product in 13 out of 14 regions.

Ebico

Ebico has branded itself as the "equitable billing company" and has been in existence since 1998. It is a not-for-profit company and has no shareholders, allowing it to focus on providing fair rates for its customers, all of whom are treated equally. Unlike some of the larger suppliers, Ebico's customers who use prepayment meters are not forced to pay the most expensive tariffs, which means that the poorest households benefit from better deals than they would with many other companies.

Ecotricity

Launched in 1996, Ecotricity invests in clean forms of power, ploughing £25m into wind energy in 2007 alone. The company prides itself on its customer service, stating: "For one thing we answer the phone, our bills are in plain English and our people are too." More than 90% of calls to Ecotricity are answered within 20 seconds and the company claims to work hard to avoid problems and to fix them quickly when they do arise.

Spark

Residential tenants may be attracted to the unique services offered by Spark Energy. The company specialises in supplying energy to tenants, property management firms and landlords. It guarantees to match or better the standard tariffs offered by the 'big six' and makes the house-moving process as simple as possible. Properties are provided with smart meters and customers even receive free cinema passes with every statement.

Utility Warehouse

Another alternative is to join the Utility Warehouse Discount Club, which provides more than 300,000 homes and small businesses with gas and electricity, home phone, mobile phone and broadband services. All of the customer's utilities come under a single bill, making it easier for them to keep an eye on their expenditure. For gas customers, the Utility Warehouse promises to keep its prices below those of British Gas, while electricity customers are guaranteed prices below those charged by their regional electricity supplier.

Why the sudden growth in competition?

The increase in the number of smaller suppliers entering the energy market may seem surprising given the dominance of the 'big six'. But new companies have created their own niches by trading on customer service, cheaper tariffs or green credentials. Thanks to their unique offerings, smaller energy companies are now giving their larger rivals a run for their money and it is hoped that this will force the 'big six' to improve their customer service and offer more attractive tariffs.

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