Chart of the week | SoLR process sees largest supplier exit

This January saw the largest supplier exit through Ofgem’s Supplier of Last Resort (SoLR) process. Green Network Energy ceased to trade on 27 January, with Ofgem appointing EDF Energy as SoLR for its 360,000 domestic customers shortly after. On the same day, the regulator announced the exit of Simplicity Energy, with British Gas’ brand Evolve appointed as SoLR for Simplicity’s 50,000 domestic customers.

Supplier consolidation is now a common part of the domestic market narrative since we recorded “peak suppliers” in 2019. The exits last month are the 11th and 12th in the supply market since January 2020 (including acquisitions, for example the purchase of SSE’s 3.5mn domestic customers by the Ovo Group, see Figure 1) and the fifth and sixth through the SoLR process during that period. Market conditions remain difficult – continuing wholesale price volatility, falling switching rates and higher winter consumption indicate that the challenge for competitors remains at scale.

Related thinking

Home supply and services

Over a third of energy suppliers have left the market

The domestic supplier market is facing a turbulent time with high wholesale prices causing distress and a series of supplier exits in the energy sector. This week's 'Chart of the week' examines these suppliers exits and their effect on the domestic market.

Home supply and services

Supplier exits predicted to trigger Renewable Obligation mutualisation

Over the past few weeks, the energy market has been under the microscope as high wholesale prices and a wave of suppliers exiting the market has hit the headlines. Amid challenging wholesale market conditions for suppliers, they are now also facing the compliance deadlines for 2020-21 of the Renewables Obligation...

Home supply and services

Domestic switching falls as the savings gap is squeezed

With day-ahead gas reaching an all-time high of 187.50p/th as of 15 September, it has been a record-breaking summer for wholesale energy prices. This Chart of the Week explores the impact these high prices are having on domestic tariffs and consumer switching behaviour.

Home supply and services

Fail to prepare, prepare to fail – domestic switching rate dips

The Energy Retail Market Strategy for the 2020s places consumer engagement as a key focus in the short term through to the late 2020s. To increase competition and engagement, current proposals include the introduction of an opt-in switching scheme and trialling opt-out switching to ‘nudge’ consumers and suppliers towards more...

Home supply and services

900,000 domestic customers impacted by SoLR over last two years

Across 2020 and 2019, 887,000 domestic customers were supplied by a company which exited the market via the Supplier of Last Resort mechanism (SoLR). On average, this is around 1.7% of the market per year. In 2018, 551,000 domestic customers were supplied by a company which entered the Supplier of...

Home supply and services

Chart of the week | Default tariff cap set to rise by at least £100 for coming winter

The default tariff price cap for a typical dual fuel direct debit customer looks set to increase by over £100 for the Winter 2021-22 period, according to an initial assessment from Cornwall Insight’s bi-annual tariff cap predictor. The latest forecast for the cap indicates that it will increase to around...

Home supply and services

Chart of the week | Green hair, green branches, green skin, green tariffs?

In this 'Chart of the week', we look at how prevalent green supply has become, unpick some of the drivers behind this, and look at the challenges now facing consumers, suppliers and policy makers confronted by a sea of green.  Over recent years, we estimate the percentage of households with...

Commercial and market outlook

Chart of the week | Getting the balance right – a new approach to policy costs?

A new report from research consultancy Public First has argued that the government should move the costs of energy policy from being heavily on electricity bills onto government expenditure. In this 'Chart of the week', we look at the four models for rebalancing put forward in the report. Options for...