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Non-domestic market update from Cornwall Energy

Non-domestic market update from Cornwall Energy

Cornwall Energy has been commenting on competition in supplying business customers for 10 years. We asked them to comment on some of the trends they saw in their latest non-domestic market share survey for standings as at 31 October 2014.

“In recent years the proportion of the electricity market held by the Big Six reduced and remains below 80% by volume and below 90% by meters, while the established pattern of share eroding faster in the half hourly (HH) market than in the non half hourly (NHH) market also continued.

“Non-Big Six suppliers sell to just under 20% of the HH electricity market by meters and just over 25% by volume, underlining that it is with the medium and larger users that these companies have had the most success. Meanwhile in NHH, non-Big Six sales both continued to hold above 10% of meters and volume.

“By and large, the long-term trend has been for the Big Six to lose market share in the areas of the market where they do not have relative strengths. However, one area where this trend is not playing out is for the very largest and most complex to serve contracts, as the Big Six increased their market share in the over 30GWh contracts sector. Moreover the squeeze on the Big Six was not experienced uniformly. One of the Big Six had a resurgence, recording an all-survey high of meters in the large end of the gas market. More generally though, this was the area of the market in which the Big Six increased their presence and it was the smaller end of the market where customers were shed. Big Six shares by meters in the over 1m therm sector rose to just under 15% by meters and just under 5% by volume.

“The overall gas market also remained competitive and there was a particular resurgence of one Big Six supplier in the market, despite the continuing reduction of share held by the Big Six. This now stands at 62% by meters and around 20% by volume. The most significant decline in the Big Six gas market share was in the under 25,000th sector—this fell below 65% for meters and below 50% for volume.

“There is a significantly greater presence of independent suppliers in the business gas market compared to the business electricity market. Their share of overall meters increased to 38% at 31 October 2014 and to just over 80% by overall volume.

“First Utility’s decision to pull back from the non-domestic market to concentrate on household supply remains the only recent supplier exit from the business market. Meanwhile, there was the entry of Danske Commodities and Corona Energy (who commenced the supply of its first electricity contracts) to the electricity market and Yu Energy, Lancashire Gas & Power and GnERGY to both the electricity and gas markets”.

Robert Buckley, Cornwall Energy

About Robert Buckley, Cornwall Energy

Tell us a bit about your background

After an economics degree at Exeter University I started working for the family business, advising large non-domestic consumers on energy contracts as supply competition began.

Since 2003 I’ve worked with Cornwall Energy advising stakeholders on energy markets, policy and helping establish the company as a leading analyst and commentator on energy supply markets.

What’s motivated your career in energy?

Energy is in the blood – my father is Andrew Buckley, director general of the Major Energy Users Council. My grandfather was on the board of British Gas in the 1970. The family business at one time involved all 3 generations.

What is the one key industry issue that business energy customers should be aware of?

How expensive bills are going to get because of our very fast policy drive for green.