Table of Contents
- Issues in the Market
- Key themes
- Definitions
- Abbreviations
- Market in Brief
- Higher prices send bills soaring
- A highly regulated industry
- Big six dominate in gas and electricity
- Tackling the issue of climate change
- Focus on metering
- Significant churn, but also consumer apathy
- Renewable energy, but not at a premium
- Growth through added value
- Internal Market Environment
- Key points
- Regulation and consumer representation
- Energy prices
- Figure 1: CPI annual price changes for electricity and gas, January
2008-July 2009
- Water prices
- Figure 2: CPI annual price changes for sewerage collection and water
supply, January 2008-July 2009
- Figure 3: Average household water bills -- comparison of companies'
final business plan proposals and OFWAT draft determinations, at 2009-10
prices, 2014-15
- Energy Supply Probe 2008
- Review of competition in the water sector
- Energy demand
- Figure 4: Domestic consumption of electricity and gas, Quarter 1
2007-Quarter 1 2009
- Investment in infrastructure
- Water metering
- Smart metering
- Energy efficiency and sustainability
- 2009 Budget
- Energy efficiency targets
- Energy saving in the home
- Water efficiency
- Fuel debt and disconnections
- Customer service
- Direct debit payment
- Broader Market Environment
- Key points
- Energy bills add to pressure on household budgets
- Figure 5: Trends in GDP, PDI and consumer expenditure, at current
prices, 2004-14
- Still a lack of activity in the housing market
- Figure 6: UK housing market -- number of transactions, average house
prices and number of years between moves, 2004-14
- Growth in households will drive new accounts
- Figure 7: UK households and size of households, 2004-14
- Ageing population concerned with cutting energy bills
- Figure 8: Structure of the UK population, by age, 2004-14
- Affluent population the most well informed
- Figure 9: Structure of the UK adult population, by socio-economic group,
2004-14
- Growth in internet penetration will help drive switching
- Figure 10: British internet penetration at home/work/place of study or
elsewhere, by gender, socio-economic group and age, 2002-09
- Gas the first choice for central heating
- Figure 11: Ownership and purchasing of central heating, 2004, 2006 and
2008
- Majority keen to reduce energy use
- Figure 12: Agreement with attitudinal statements, 2004, 2006 and 2008
- Competitive Context
- Key points
- Soaring gas and electric prices push up bills
- Figure 13: Comparison of spending on utility bills with other spending,
at current prices, 2004-08
- Figure 14: Household spending on utility bills as a proportion of
consumer spending, 2004-08
- Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
- Market Size and Forecast
- Key points
- Higher energy prices push up utility bills
- Figure 15: Consumer spending on home utilities, 2004-14
- Gas increases its share of total spending
- Figure 16: Breakdown of consumer spending on home utilities, by segment,
2004, 2006 and 2008
- Figure 17: Trends in consumer spending on home utilities, at current
prices, 2004-08
- Differential pricing impacts on annual bills
- Figure 18: Average annual domestic standard electricity and gas bills,
by method of payment, 2008
- Market Share
- Key points
- Big six suppliers dominate gas and electricity
- Figure 19: Estimated market shares of domestic GB electricity and gas
supply markets, by number of domestic customer accounts, 2008
- Regional monopolies in water and sewerage treatment
- Companies and Brands
- Gas and electricity suppliers
- British Gas
- EDF Energy
- E.ON UK
- npower
- Scottish Power
- Scottish and Southern Energy
- Other companies
- Water companies
- Anglian Water
- Severn Trent Water
- Thames Water
- United Utilities
- Other companies
- Figure 20: Other water and sewerage companies in the UK, and the regions
they operate in, 2009
- Figure 21: Other water companies in the UK, and the regions they operate
in, 2009
- Brand Communication and Promotion
- Key points
- Advertising dwarfed by total spending on utilities
- Figure 33: Main media advertising expenditure on redidentaial utilities,
2005-08
- British Gas leads top advertisers
- Figure 34: Main media advertising expenditure on residential utilities,
by company, 2005-08
- Media type
- Figure 35: Main media advertsing on residentail utilities, by media
type, 2005-08
- Green issues a dominant theme
- Sponsorship key part of building brand awareness
- Switching Energy Suppliers
- Key points
- Significant churn in the energy supply sector
- Figure 36: Incidence of changing gas or electricity supplier in the last
12 months, 2008
- Lack of enthusiasm for switching energy supplier
- Figure 37: Agreement with statements on changing energy suppliers, July
2009
- Internet key part of the switching process
- Figure 38: Switching energy supplier via the internet, by age and
socio-economic group, July 2009
- But more switch as a result of direct selling
- Figure 39: Switching supplier as a result of doorstep visit or phone
call, by age and socio-economic group, July 2009
- An element of distrust and some desire for direct contact
- Qualitative research
- Quick and easy to compare prices
- Strong media exposure
- Users generally satisfied with switching/price comparison sites
- As comprehensive as they need to be
- Cold-calling/doorstep selling
- Tariff Choices and Energy in the Home
- Key points
- Saving money and reducing carbon footprint
- Figure 40: Agreement with statements relating to tariffs and energy in
the home, July 2009
- Home insulation to keep down heating bills
- Figure 41: Have had home insulated to save on energy bills, by age and
socio-economic group, July 2009
- Renewable energy, but not at any cost
- Figure 42: Attitudes towards renewable energy, by age and socio-economic
group, July 2009
- Duel fuel and fixed tariffs seen as ways to cut bills
- Figure 43: Take-up of dual fuel and fixed price tariffs, by age and
socio-economic group, July 2009
- One in ten struggling to pay their energy bill
- Most have enough information on energy saving
- Online accounts save paper and money
- Mixed messages on billing and metering
- Appendix -- Internal Market Environment
- Figure 46: Ownership of central heating, by demographics, 2008
- Appendix -- Switching Energy Suppliers
- Figure 47: Agreement with statements on changing energy suppliers, by
demographics, July 2009
- Figure 48: Agreement with statements on changing energy suppliers, by
demographics, July 2009
- Appendix -- Tariff Choices and Energy in the Home
- Figure 49: Agreement with statements relating to tariffs and energy in
the home, by demographics, July 2009
- Figure 50: Agreement with statements relating to tariffs and energy in
the home, by demographics, July 2009
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