E.ON Next finalized its purchase of Ovo Energy on Thursday following approval from Britain’s competition regulator, a transaction that significantly reshapes the country’s household energy supply landscape. The combined entity will serve approximately 13.45 million gas and electricity accounts, representing 25% of the market and establishing E.ON Next as the second-largest supplier in Great Britain.
The acquisition leaves the market concentrated among three dominant players. Octopus Energy maintains the largest share at 26% with 14.3 million accounts, while British Gas holds 23% with approximately 12.5 million accounts. When including EDF Energy and Scottish Power, the top five suppliers will control roughly 90% of the household energy market. This consolidation represents a significant reversal of efforts over the past decade to increase competition in the sector.
Market analysts have expressed concerns about the implications of this concentration. Industry experts noted that while larger suppliers offer operational stability following the exit of dozens of smaller firms during recent market turmoil, the reduced number of competitors may diminish pressure to maintain competitive pricing and service differentiation. The 2016 Competition and Markets Authority investigation had identified weak competition as a factor enabling customers to be overcharged by an estimated £1.4 billion to £1.7 billion annually.
Company leadership dismissed competitive concerns, with E.ON UK’s chief executive characterizing the market as “fiercely competitive” and citing the organization’s capabilities to serve customers effectively. Industry observers acknowledged that consolidation has provided stability following the 2021-2022 energy crisis, during which numerous suppliers ceased operations. The critical test ahead will be whether the remaining major suppliers continue to offer genuine choice and competitive pricing to customers who switch providers.
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