And then there were 5: consolidation in UK power sector

INSIDERS HAVE RAISED concerns that the proposed sale of nPower will reduce investment and competition in the UK power sector. The “big 6” generators – EDF, E.ON, , nPower (owned by RWE), Centrica, Scottish Power and Scottish and Southern Energy – between them account for sponsorships worth around £20m per year mainly in football and rugby. Lee Summers, director of renewable company EOS Energy said: “nPower will almost inevitably be purchased by one of its competitors which will leave us with a ‘big five’. That is not the way to go if you want to increase investment and competition.” Power companies have fought for market share since the breakup of the monopoly LECs in the 1980s. Sponsorship has been used successfully to acquire new customers but has recently been linked to carbon reduction messages. The prospect of consolidation is likely to trigger an investigation by competition regulators in the UK and lead to a period of uncertainty. Power generation and supply is a long-term business and this could lead to plants and marketing campaigns being mothballed.