Product Promotion Network

Npower and SSE plan merger into new energy company

Energy companies Npower and SSE are in talks about joining together to create a new gas and electricity supplier. But neither supplier is rated highly by its customers. Could the merge help them improve?

SSE is the second-biggest energy supplier in Great Britain. Around 7.77 million households are its customers, while Npower serves 4.8 million households. If they joined together, the new company could become the electricity supplier with the biggest market share, overtaking British Gas.

But our survey has shown that these companies aren’t viewed particularly favourably by their customers. Read on to find out more about how Npower and SSE compare, their customer ratings, and how you might be affected if you’re one of their customers.


Npower or SSE customer? Compare gas and electricity prices[1] to find the best deal for you using our independent energy switching service, Which? Switch.


SSE and Npower compared

In August Npower[2]‘s owner, Innogy, said that it would have a financial loss this year.

Meanwhile, SSE[3] revealed in July that it had lost 230,000 customers over the past year. Both energy firms raised their prices earlier this year – along with the rest of the Big Six – but Npower’s price rise was the greatest. Its standard tariff is currently the priciest among the Big Six firms, costing ?1,166 per year for the average user.

The cheapest deal available across England, Scotland and Wales is currently Economy Energy’s Online Saver, costing ?830 a year for the average household. SSE currently has 14% electricity market share, compared with Npower’s 10%, according to energy regulator Ofgem’s figures. They both also supply 11% of the household gas market.

Combined, this could see the new company have 24% electricity market share – bigger than British Gas[4]‘s 22% – and 22% gas market share (still short of British Gas’s 33% gas market share).

The best and worst energy firms

Npower was rated the worst energy supplier in our most recent survey of more than 8,000 energy customers in the UK. Its overall customer score of 44% fell far short of top-scoring small supplier Ovo Energy[5]‘s 78%. Npower was also the only energy supplier to score one star for helping customers to save energy, when we asked its customers to rate it.

SSE scores better, but still not highly. See our full energy satisfaction survey results[6] to find how it fares alongside 23 other gas and electricity firms.

What does this mean for Npower and SSE customers?

SSE’s talks with Npower’s parent company, German firm Innogy, ‘are well advanced but no final decisions have been taken’, according to SSE. At this stage, it’s therefore too early to say what this would mean for customers of the two companies, or the price of their energy deals.

SSE said: ‘In line with its stated commitment to embrace change in each of its businesses, adapting them to the political, economic, social and technological requirements of customers and of society as a whole, the board of SSE has been in discussions with Innogy about creating a new independent energy supply company.’ It added that it will ‘disclose the outcome of the discussions as soon as they are concluded’. This follows closely behind SSE’s announcement[7] that it would stop automatically putting customers onto variable tariffs that are the most expensive at the end of their fixed deals, from early next financial year.

Instead, it will put customers onto an equivalent cheaper fixed-term deal.

Besides SSE, British Gas, Eon and Scottish Power have also all committed to moving customers off their more expensive standard tariffs.

References

  1. ^ Compare gas and electricity prices (switch.which.co.uk)
  2. ^ Npower (www.which.co.uk)
  3. ^ SSE (www.which.co.uk)
  4. ^ British Gas (www.which.co.uk)
  5. ^ Ovo Energy (www.which.co.uk)
  6. ^ full energy satisfaction survey results (www.which.co.uk)
  7. ^ SSE’s announcement (www.which.co.uk)

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