E.ON Next’s Ovo takeover leaves three suppliers serving 74% of households
E.ON Next has completed its takeover of Ovo Energy, leaving nearly three-quarters of Great Britain’s households supplied by three companies. The deal was cleared by the competition watchdog despite concerns that fewer suppliers could reduce customer choice and weaken pressure to keep bills down.
E.ON Next now serves 25% of households, just behind Octopus Energy at 26% and ahead of British Gas at about 23%; Ovo’s four million customers will see no immediate change. Including EDF Energy and Scottish Power, five suppliers will hold about 90% of the market. The shift follows a period when dozens of suppliers collapsed during the 2021-22 energy crisis, while critics say the test will be whether customers can still find genuinely different deals.
- E.ON Next has completed its purchase of Ovo Energy.
- Three suppliers now serve nearly three-quarters of households.
- Watchdog concerns centre on choice and pressure to lower bills.
New here? Start with this
British households can choose from various suppliers for their electricity and gas. Following E.ON Next's takeover of Ovo Energy, three suppliers—E.ON Next, Octopus Energy and British Gas—now serve nearly three-quarters of all households in Great Britain. Five major suppliers control around 90 per cent of the market.
The energy sector underwent significant consolidation during the 2021-22 energy crisis, when soaring wholesale costs caused dozens of smaller suppliers to fail. Customers of failed suppliers were transferred to larger firms, accelerating the consolidation. This period has shaped the current market dominated by a handful of large suppliers.
As three suppliers now serve three-quarters of households, questions have been raised about whether competition remains sufficient to restrain prices and whether customers can find genuinely different deals. The number of suppliers in the market influences consumer choice and what pricing options are available.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The energy market faced genuine systemic risk when dozens of suppliers collapsed during the 2021-22 crisis, threatening supply security and consumer protection. Consolidation around financially robust operators ensures market stability and the ability to weather extreme price volatility; smaller, undercapitalised suppliers cannot reliably compete during supply shocks. The regulator's approval reflects confidence that monitored concentration can maintain competitive outcomes—consumer choice ultimately depends on companies having sufficient financial strength to compete and innovate.
The case against
A market where three suppliers serve three-quarters of households is fundamentally less competitive by definition. With 90% of the market held by five companies, there is structurally reduced scope for customers to benefit from competitive pricing pressure or switch to genuinely differentiated providers. The regulator's own stated concerns about weakened pricing pressure suggest fundamental doubt about whether this concentration adequately protects consumers; historically, such concentrated markets deliver worse outcomes on bills and service innovation.
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Originally published by The Guardian as “E.ON Next deal to buy Ovo Energy leaves UK with just ‘big three’ energy suppliers”.