E.ON Next finalized its purchase of Ovo Energy on Thursday following approval from Britain’s competition watchdog, a transaction that significantly concentrated the household energy supply market. The deal gives E.ON Next control of approximately 25% of the market with 13.45 million gas and electricity accounts, making it the second-largest supplier in Great Britain behind Octopus Energy, which holds a 26% share with 14.3 million accounts.
The consolidation represents a substantial shift in market structure. The legacy “Big Six” energy suppliers—British Gas, EDF Energy, E.ON UK, SSE, Scottish Power and npower—controlled approximately 85% of the market in 2016. Following the E.ON Next deal, just five suppliers will hold about 90% of the household energy market, with British Gas holding approximately 23% of accounts. Industry analysts noted that this concentration represents a departure from efforts over the past decade to dismantle dominance among the largest suppliers and foster greater competition.
Market observers expressed mixed assessments of the consolidation’s implications. While larger suppliers provide operational stability—a consideration following the failure of dozens of smaller competitors during the 2021/22 energy crisis—industry experts cautioned that reduced supplier competition could diminish incentives for price reductions and differentiated offerings. The energy market experienced significant turbulence following a 2016 investigation that found customers were overpaying due to weak competition.
E.ON UK’s chief executive stated that the market remains “fiercely competitive” and that the company’s scale and flexibility would enable it to serve customers effectively. However, market analysts indicated that coming years would reveal whether households seeking better rates encounter genuine choice among the three largest suppliers or minimal differentiation in available offerings.
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