Recent years have seen unprecedented activity in the utilities market, with more electricity and gas retailers than ever before and an opening up of the water market. Yet just as the emergence of the so-called ‘big six’ was driven by the need for companies to make economies of scale, so too will the next wave of consolidation. What’s different this time is the impact of digital technologies.
Gaining share of this dynamic market requires a strong brand, an efficient operating model and a clear price proposition – particularly with the degree of choice now available both to business and domestic customers. In the electricity and gas markets, we’re likely to see a swing back to a smaller number of suppliers, with new kinds of specialist related services such as energy efficiency, for example. For water, the same kind of consolidation and specialisation is likely to occur in the business-tobusiness space. In terms of variation between the different segments of each industry – generation, transmission, distribution and retail – most of the consolidation and specialisation will be in retail. New services are likely to emerge targeted at larger businesses; a supplier of electricity, gas and water, for example, could offer bundled services for multi-site business customers.
