Besides the Big Six (British Gas, EDF etc), there are over 60 smaller suppliers, who together control 23% of the electricity market and 24% of the gas market. In fact, smaller suppliers are increasingly attracting customers away from the Big Six with cheaper tariffs, better customer service and niche selling points such as being app-based or offering 100% renewable energy.
However, with the influx of new suppliers, many have gone bust after not being to keep up with increases in wholesale energy prices and government regulation - including a price cap on standard variable tariffs. A shocking EIGHT suppliers went bankrupt in 2018 alone including Spark Energy who left 290,000 customers temporarily without a supplier. Thankfully, shortly after they went bust, OFGEM appointed green supplier OVO Energy to take over Spark's customers.
Advantages of Small Suppliers
There are several reasons to switch to a smaller supplier for electricity and/or gas:
- They are often cheaper than the Big Six
- They often specialise in a specific fuel (e.g. renewable energy)
- They often have local history, having started in a specific county
- Many are more environmentally or socially-concious than the Big Six
Disadvantages of Small Suppliers
There are also several reasons not to switch to a smaller supplier:
- Smaller energy suppliers have smaller call-centres and customer care may not be as reliable
- It is often more difficult to get energy-saving advice from smaller suppliers
- Some smaller suppliers only provide one fuel (electricity or gas)
- Higher risk of smaller suppliers going bust