By Ben Kerrigan-
LONDON — Britain’s household energy market has entered a new phase of consolidation following E.ON Next’s acquisition of OVO Energy, a development that leaves almost three-quarters of domestic customers supplied by just three major energy groups and raises questions about the strength of competition at a time when household budgets remain under pressure.
The acquisition, completed on 8 October 2026 after clearance by the Competition and Markets Authority, has reshaped the market’s balance of power. E.ON Next now accounts for approximately 25% of Great Britain’s household energy market, narrowly behind Octopus Energy on 26%, while British Gas holds around 23%. The figures reported following the takeover suggest that a substantial majority of households are now concentrated among these three suppliers.
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There is no immediate change to OVO customers’ tariffs or customer-service arrangements as a result of the transaction, according to E.ON Next. Existing tariffs are being honoured, and customers are to be notified of future changes affecting them. But the longer-term implications extend beyond the immediate experience of individual customers because a concentrated market is not automatically an uncompetitive one.
Large suppliers may benefit from economies of scale, greater investment capacity and the ability to develop new tariffs, digital services and flexible energy products. The critical question is whether those advantages translate into better outcomes for customers or leave households with fewer meaningful alternatives.
The timing is particularly significant because affordability remains a central problem for energy consumers. In research published on 14 October, Ofgem found that 44% of consumers were keeping up with household bills but struggling to do so. Energy bills remained the bill type most often reported to be in arrears, while 40% said they were managing their energy payments with difficulty.
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The same research found that 24% of respondents had not switched supplier or tariff in five years. Just over half, or 52%, said they had switched supplier or tariff at some point. Among people who reported multiple barriers to searching for a better deal, the most common obstacle was not finding a cheaper option, cited by 15%, followed by a lack of time or a switching process considered too time-consuming, cited by 14%.
These findings raise a question that deserves greater attention than the usual advice to shop around: what happens when a consumer is willing to switch but cannot find a saving that justifies doing so?The traditional argument for competition is that suppliers compete for customers through lower prices, improved service and attractive tariffs. Consumers who are dissatisfied can move elsewhere, forcing companies to improve their offers.
But that mechanism depends on there being meaningful differences between available deals, and on consumers having the time, confidence and financial flexibility to act.
When households are already struggling to cover food, rent, mortgage payments and energy, the ability to compare dozens of tariffs may be less useful than it appears. Some consumers may also remain on default tariffs because they cannot afford the risk of a fixed deal that later proves more expensive, or because the savings available to them are too small to make switching worthwhile.
Ofgem’s latest satisfaction survey adds another dimension to the debate. It found that 82% of consumers were satisfied with their energy suppliers, while satisfaction with value for money rose to 72%. Those results are encouraging, but they do not settle the question of whether the market offers sufficient price competition. Customer satisfaction, price affordability and market concentration measure different things.
The regulator’s debt figures illustrate the scale of the challenge. By the second quarter of 2026, combined domestic energy debt and arrears had reached approximately £5.02 billion. Average electricity arrears without a repayment arrangement stood at £1,872, while average gas arrears in the same category reached £1,613. The figures show how financial pressure can persist even as reported satisfaction with suppliers remains high.
There is also a potential cost for customers who continue paying on time. Ofgem has warned that energy debt creates costs for suppliers and, ultimately, for other bill payers. In a market where many households are already struggling, the regulator faces the difficult task of protecting consumers in arrears without transferring an ever-growing burden to those who are managing to meet their bills.
The Competition and Markets Authority cleared the E.ON–OVO transaction at its initial investigation stage. That decision means the acquisition was permitted to proceed; it does not establish that the resulting market structure will necessarily produce the best outcomes for consumers over the longer term. Equally, the existence of three large suppliers is not proof that competition has failed. The real test will be how the market behaves after consolidation.
Ofgem and the competition authorities should closely monitor whether tariffs remain competitive, whether customers can identify and access genuine savings, and whether the combined businesses maintain acceptable standards of customer service. They should also examine how consolidation affects the range of tariffs available to households with different consumption patterns, payment methods and financial circumstances.
Transparency will be particularly important. Published comparisons distinguish between headline annual estimates based on typical usage and the actual rates and standing charges customers pay. They should also make it easier to identify whether switching would produce a realistic saving for a household with its own pattern of energy consumption.
The Government has a role too. Competition cannot, by itself, resolve an affordability problem caused by a combination of high underlying energy costs, household income constraints and accumulated debt. Targeted assistance, effective debt-management arrangements and improvements to the energy efficiency of homes may be necessary alongside measures designed to preserve competition.
The message for households is not to assume that the acquisition automatically means higher prices or poorer service. Customers should check their existing tariff, compare the actual rates available to them and consider any exit fees or conditions before switching. Those who cannot pay should contact their supplier to discuss repayment options and support rather than allowing arrears to grow unchecked.
Analysts believe the bigger issue is one for regulators. A competitive market should give consumers a realistic chance of securing a better deal, not simply the theoretical right to choose between companies. If the market continues to consolidate while significant numbers of customers say they cannot find a cheaper tariff, regulators need to establish whether that reflects unavoidable energy costs, limited commercial incentives, obstacles to switching or some combination of these factors.
The acquisition of OVO by E.ON Next is therefore more than a corporate transaction, but rather, a test of whether Britain’s energy market can preserve meaningful consumer choice while becoming more concentrated. At a time when millions of households are struggling to keep up with bills, the success of competition should be measured by the savings and security it delivers, not simply by the number of suppliers advertising their services.
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