December 17, 2018
Two of the UK's 'Big Six' energy suppliers, Npower and SSE, have said that they will no longer go ahead with their planned merger.
SSE has blamed "very challenging market conditions" for the decision.
Indications that the merger might collapse became apparent in November, only one month after it was given the final green light by the Competition and Markets Authority. Npower and SSE said they would have to renegotiate the deal after the official announcement of the government's new energy price cap.
Had the merger went ahead, it would have created the UK's second-biggest energy supplier.
Martin Hermann, retail chief operating officer of Innogy SE, which Npower is a part of, said: "Adverse developments in the UK retail market and regulatory interventions such as the price cap have had a significant impact on the outlook for the planned retail company.
"We negotiated intensively with SSE on adjustments to the transaction as announced in November 2017.
"Unfortunately, we could not reach an agreement that was acceptable for both sides. We are now assessing the different options for our British retail business."
The Energy Price Cap
More than half of the households in Great Britain are on their energy suppliers default tariff. This is because they have either never switched energy supplier or haven't done so recently.
In a bid to stop these customers from paying more than is necessary on their energy bills, the regulator Ofgem announced an energy price cap.
Ofgem's energy price cap will go live on 1st of January 2019. Energy suppliers will not be allowed to charge more than £1,137 a year for a "typical use"* customer.
Ofgem has claimed that the price cap will save 11 million customers an average of £76 a year on their gas and electricity bills.
Households on a default tariff could save money by comparing and switching to a cheaper energy deal, even after the energy price cap is introduced.
You can compare energy suppliers on Energylinx's website or by calling 0800 849 7077. One of our energy advisors will be able to find the best deal for you. We are open Monday to Friday 9am to 6pm and Saturday 9am to 3pm.
*A typical use customer is a medium user. According to Ofgem a medium user use 12,000kWh for gas and 3,100kWh for electricity. If your energy use is higher or lower than a typical user, then you will be charged accordingly.
Posted on December 17, 2018 at 11:53 AM