Scottish utility SSE said yesterday it has been in talks with Npower’s German owner, Innogy, about creating a new independent UK energy supply company.
Discussions between the two companies were “well-advanced”, Perth-based SSE said, cautioning that no binding agreements regarding the combination had been entered into.
The announcement follows speculation that SSE was poised to exit the domestic supply market altogether, and reports suggesting Innogy could sell Npower or combine it with a rival.
It also comes as the UK’s Big Six brace for a raft of regulatory changes after the UK Government announced last month that a price cap will be imposed on poor-value energy tariffs.
SSE is the UK’s second largest energy supplier, serving 7.77million households, while Npower caters to 4.8million.
Centrica, ScottishPower, E.On and EDF make up the rest of the Big Six. All are under pressure from smaller rivals taking market share.
ScottishPower railed against the price cap as Spanish owner Iberdrola posted results yesterday.
Chief corporate officer Keith Anderson said: “It will be bad for consumers, energy companies big and small, as well as investor confidence.”
ScottishPower’s underlying third-quarter retail supply earnings fell to £59.4million, from £152.3million a year earlier.
