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Gas and Electric Suppliers: The UK's Big Six

By Edited Sep 2, 2016 0 0

A little over twenty years ago, if you wanted gas in the UK you bought it from the Gas Board. If you wanted electricity, you bought it from the Electricity Board. Not a lot of competition, but pretty easy to work out where you got the best deal!

Then in 1990 both were privatised. Within a very short space of time it seemed you could buy gas from an electricity company, electricity from a gas company, both from your supermarket or, potentially, from someone whose main business might be manufacturing dog food.

Not only did everything get very complicated, but eventually it helped - at least in part - to create a whole new type of enterprise: the comparison site. Somewhere you can go to find out just which energy supplier will give you the cheapest prices. Check out any of them and it seems there are dozens of different gas and electric suppliers waiting to serve you.

The True Story Is...

In fact it's highly likely that no matter who actually sends you the bill, your energy needs are catered to by one of just six companies. It's a question of infrastructure and when you think about it, it's not surprising. A supermarket might offer you a great deal on gas, but they're not suddenly going to dig up the roads and bring a pipe to your house!

It has parallels in other privatised industries. You might pay any one of a several firms for your phone calls, but few have the resources to actually build and maintain the networks. You can get on trains run by a number of different companies, but only one looks after the actual rails.

Between them, the "big six" provide gas and electricity to over 50 million homes and businesses across the nation. So who are they? Some of the answers prove very interesting indeed and show just how far-reaching energy provision has become.

The Largest Is...

Biggest of the big is British Gas, supplying something like 20 million business premises and private homes. Scottish Gas is part of the same group, which is owned by Centrica.

So British Gas supply gas (surprise, surprise) and electricity across the UK, but that's just part of the story. Parent company Centrica also supplies electricity in North America, through a Canadian-based company. If you think that's complicated, they also own Dyno-Rod and, for a while owned phone company One-Tel - who are now part of Carphone Warehouse.

However, if you think that's intricate, there's much more to come, and it won't be until the last of our 'big six" that we actually return to a British-owned company.

The Power of Europe...

EDF Energy is second on our list of firms delivering the UK's gas and electricity, satisfying the demands of around 6 million homes but, in case you didn't know, EDF stands for Électricité de France - a company that is approximately 85% owned by the French government.

As a company, EDF isn't exactly used to being number two. Number one is their normal position. Apart from being the only supplier of electricity in France at present, they also provide around 20% of all the electricity used in Europe. Indeed they are currently the largest electric utility business in the world, with substantial interests in both North and South America, Africa and Asia.

They are also owners, perhaps not surprisingly given the government's involvement, of Gaz de France.

And In Third Place...

We cross the border into Germany for the UK's third biggest energy supplier, to Düselldorf. Here you'll find the world's biggest investor-owned provider of electric services, with interests in more than 30 countries around the globe and a customer-base of upwards of 25 million. They also supply a considerable amount of gas, servicing the needs of people in 20 European nations. There are further interests in the USA.

It's becoming clear that if you want to compete in this market you need to have global resources and massive financial muscle. Our fourth largest energy provider reinforces this idea.

Npower are owned by another German conglomerate: RWE, a business that encompasses electricity distribution, gas exploration, production, transportation and distribution, plus interests in renewable energy through a growing number of wind farms. They even owned Thames Water for a while, though that has now been sold to an Australian-based consortium. Global business transactions can sometimes seem quite mind-boggling!

Although our fifth-largest UK power company is called Scottish Power, we're staying in Europe as far as ownership is concerned. This time it's Spain's turn, with Bilbao-based Iberdrola.

It's another multi-national conglomerate. From its Basque origins it has grown to supply electricity to parts of Europe, the USA, Brazil and others. It's also heavily into renewable power, being possibly the world's largest producer of wind energy.

For the last member of our big six we return to the UK. To Scotland to be precise. You might know them as Southern Electric, SWALEC, Scottish Hydro or SSE, but it's SSE who is the parent. With combined customers of 9.6 million you could argue that they should, in fact, hold second spot on our list, but we've put them in sixth because they still operate as those four businesses.

However you look at it, it's still a very large and impressive organization. Beyond the obvious generation and supply of gas and electricity, they also have interests in hydro, renewable and nuclear energy, plus telecoms networks.

Not On Your Bill...

It's quite possible that none of the above gas and electric suppliers appear on your bill - and in truth it's not at all important. The open market means that anyone with enough clout can do a deal with one of the above in order to supply you with the energy for your home. Whoever that is - whether they operate under the name of an energy company, a supermarket or Joe Blogs Trading, they are effectively acting as a broker. They have the financial muscle to buy cheaper than you can, then selling it on to you for a small profit. They don't actually build anything or deliver anything, it's more or less just a paperwork transaction.

From the point of view of the end user, this should actually be a good thing - the more the merrier. With so many companies competing for your business, there's almost always a better deal than the one you're currently getting if you are prepared to look for it.

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