The big six could become the big three after E.ON and OVO merge

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Concerns about the merger of E.ON and OVO have been raised as a report from Cornwall Insight says it will leave Octopus Energy, British Gas and E.ON with 74% of the domestic energy market.

Data collected by Cornwall Insight put the enlarged E.ON as the second biggest domestic supplier in the UK, with 25% of household electricity and gas accounts.

This follows closely behind Octopus Energy with 26% and ahead of British Gas at 23%.

Tom Goswell, Energy Supply Lead at Cornwall Insight:”The big six have become the big three, and there have been questions raised over how this will impact household choice and the health of the market.

“Larger suppliers do bring with them a degree of stability, and after around 30 firms dropped out of the market, leaving customers wondering who would be sending their next bill, stability is not something to dismiss lightly.”

Following the takeover, the top five suppliers, which include EDF and Scottish power (SP) on top of the largest three suppliers, will control 90% of the market.

Mr Goswell added that fewer suppliers eases the pressure to compete, meaning that the incentive to keep prices low and offer “something different” could also disappear.