We often hear the term ‘big six’ in the news. But many of us are not aware of what the ‘big six’ is all about. Well, the big six refers to the six biggest energy suppliers in the UK. They are highly significant by holding the major share of energy supply in the UK.
Traditionally, the Big Six were EDF Energy, Npower, British Gas, ScottishPower, SSE, and E.ON UK. These suppliers are responsible for providing energy for 70% of households in the UK. But there are also a large number of small suppliers in the UK which are expanding their operations gradually.
As these big six companies are predominant suppliers in the market, they also pose a challenge to the competitiveness of the energy market. These companies have full control in fixing prices for electricity and gas supply till 2019. In 2019, with the introduction of the energy supply cap, it becomes tough for these companies to regulate the pricing.
Also, the informed customers today look up to the platforms like Utility Bidder to compare the prices of various energy suppliers and choose the best one depending on their consumption levels and flexible plans.
What Big Six companies emerged as a threat in the energy sector?
The main reason for the threat for big six companies is their dominance resulting in high energy bills and uncompetitive tariffs. The huge structure of these companies helps them with autonomy with their buying and energy trade between each other.
As an oligopoly market is likely to experience less competitiveness, the only solution is to encourage new players in the energy market to prevent any control on pricing by these big six companies.
Therefore, customers often switch between suppliers not only to benefit the consumers with cost-efficient plans but also discourage the suppliers to fix pricing arbitrarily.
But there is a huge misconception among the people that changing energy suppliers are associated with a lot of hassles. Many people believe that switching to a new supplier leads to the replacement of pipes and cables which is cost-intensive.
However, the truth is the opposite. When you switch from one energy supplier to another, the cables and the pipelines remain the same. You even stay on the same energy, only the billing of energy is changed and in accordance with the new energy supplier.
Is it advisable to switch to a small energy supplier?
Yes! Small players offer the rates at par with Big Six or even more competitive prices to make their mark in the energy market. People are often reluctant in switching to these small players but switching to them helps in saving energy bills to a considerable extent.
The major fear that the people have in switching to these small suppliers is their instability in the market which can push these suppliers any time out of the market. Over the past few years, many small companies have gone out of business as they were not able to achieve the scale of economies.
Another concern is the issue with their customer services which are not at par with the big six companies.