Business Energy Suppliers UK: Who Holds an Ofgem Licence and How the Market Splits

A business arranging its energy supply for the first time will find the market structured very differently from the domestic sector. There is no price cap equivalent for commercial customers, no single comparison service overseen by a regulator, and the range of suppliers active in non-domestic supply is considerably broader than the handful of brands most people associate with home energy. Understanding how the market is structured and who holds a supply licence is the starting point for navigating it effectively.

How business energy supply licensing works

All gas and electricity suppliers operating in Great Britain must hold a supply licence issued by Ofgem. The legal basis for electricity supply licensing is the Electricity Act 1989, which requires any person supplying electricity to premises to hold a licence granted by the Gas and Electricity Markets Authority (the statutory body that Ofgem administers). The equivalent for gas is the Gas Act 1986.

A licence to supply does not, by itself, limit a supplier to domestic or non-domestic customers. Most licences authorise supply to all customer classes. However, many suppliers choose to operate only in one segment - they may hold a full licence but actively market only to business customers, or only to households. Ofgem publishes a register of all licensed electricity and gas suppliers on its website, which lists every holder of a current supply licence regardless of whether they are actively trading.

The supply licence conditions set out the obligations a supplier must meet. Some conditions apply only to domestic customers (the price cap, for example, and certain switching protections). Others apply across all customer categories, including non-domestic. The distinction between domestic and non-domestic licence conditions is a material one for businesses assessing their rights.

The structural difference from the domestic market

The domestic energy market is dominated by a small number of large national suppliers and is subject to the default tariff cap introduced under the Domestic Gas and Electricity (Tariff Cap) Act 2018. No equivalent cap applies in the non-domestic sector. Business energy prices are entirely commercially negotiated and vary by contract length, consumption volume, meter type, credit profile, and market conditions at the time of contracting.

A second structural difference is the role of intermediaries. In the domestic market, price comparison websites are the primary switching channel. In the non-domestic market, energy brokers (third-party intermediaries or TPIs) arrange a significant proportion of business contracts, particularly for small and medium-sized enterprises. These brokers are paid commission by suppliers and are subject to Ofgem's TPI code expectations and the specific microbusiness broker disclosure rules covered in the supply licence conditions.

A third difference is the segmentation of the market by customer size. The non-domestic market is broadly divided between the SME segment (typically defined by annual consumption and connection type) and the industrial and commercial (I&C) segment, which covers larger sites often with half-hourly metered connections, bespoke contract structures, and direct relationships with traders rather than retail sales teams.

Named suppliers active in the non-domestic market

The following suppliers hold licences and actively market business energy products as of the last review date. This list is not exhaustive and reflects the active market rather than the full Ofgem licence register:

• British Gas Business: the commercial arm of Centrica, serving SME and I&C customers across electricity and gas
• EDF Energy: active in both SME and I&C segments, with a significant large-site portfolio
• E.ON Next Business: the business-facing brand of E.ON UK following its acquisition of npower's retail business
• ScottishPower: owned by Iberdrola, operating across SME and larger commercial segments
• Octopus Energy for Business: grown significantly in the SME market since entering non-domestic supply, known for API-driven account management
• SSE Business Energy: part of OVO Group following OVO's acquisition of SSE's retail operations, active in SME supply
• Drax Business: the retail arm of Drax Group, serving larger commercial and industrial customers
• Crown Gas and Power: focused on SME gas supply
• Yu Energy: SME-focused supplier operating primarily in the Midlands and North of England, listed on AIM
• Total Energies Gas and Power: I&C-focused, part of the TotalEnergies group
• Gazprom Energy: I&C-focused, serving large commercial and public sector organisations

The Ofgem licence register provides the authoritative list. Supplier entry and exit in the non-domestic market occurs more frequently than in the domestic sector, and businesses should verify that any supplier they are considering holds a current active licence.

SME-focused versus I&C-focused suppliers

The distinction between SME-focused and I&C-focused suppliers reflects differences in customer acquisition model, contract structure, and the systems used to manage accounts.

SME suppliers typically serve customers with annual electricity consumption below 100,000 kWh and annual gas consumption below 293,000 kWh - the thresholds also used by Ofgem to define microbusiness customers. At this scale, suppliers offer standardised fixed-rate contracts, online account management, and broker-channel distribution. Margins are managed across a large number of similar accounts.

I&C suppliers serve larger sites, often with half-hourly metered electricity connections, complex gas profiles, or multiple supply points across a national estate. Contracts at this level are individually structured, may include flexible purchasing arrangements (where the buyer locks in tranches of electricity at different times rather than a single fixed rate at contract start), and are typically managed by specialist account teams or energy managers rather than small business owners.

Some suppliers operate in both segments through different product lines or divisions. A group entity may have a retail SME brand and a separate I&C trading operation, even if both sit under the same supply licence.

How Ofgem oversees the non-domestic market

Ofgem's role in the non-domestic market is primarily one of licensing and enforcement rather than direct price regulation. It sets the supply licence conditions that all suppliers must comply with, investigates breaches, and can impose financial penalties. It also oversees the market-wide settlement systems - the Balancing and Settlement Code (BSC) administered by Elexon - that underpin how electricity costs are allocated between suppliers.

Ofgem does not approve or regulate the prices suppliers charge business customers, does not operate a business energy price comparison service, and does not have a statutory duty to ensure affordability for commercial customers in the way it does for domestic consumers. Business customers experiencing supplier problems have more limited regulatory recourse than domestic customers, though microbusiness customers have access to the Energy Ombudsman under Ofgem's licence conditions.

The non-domestic market is also subject to competition law as enforced by the Competition and Markets Authority. The CMA conducted a major investigation into the energy market in 2014-2016, and the findings shaped subsequent Ofgem reforms including the introduction of microbusiness protections and enhanced TPI transparency requirements.

Entering and exiting the non-domestic market as a supplier

Obtaining a supply licence from Ofgem requires meeting capital adequacy requirements, demonstrating operational capability to manage metering and settlement obligations, and satisfying Ofgem that the applicant can comply with all relevant licence conditions from the point of supply. The process is governed by Ofgem's licensing procedures and the Energy Act 2011.

Supplier exit - whether voluntary or due to financial failure - is subject to the Supplier of Last Resort process. When a licensed supplier ceases trading, Ofgem appoints a SoLR to take on the failed supplier's customer portfolio. The mechanism is described in detail in a separate article.

Frequently asked questions

Editorial disclaimer: This article describes the structure of the UK non-domestic energy market based on publicly available licensing information and does not constitute commercial advice for any specific business.

Is there a price cap for business energy in the UK?

No statutory equivalent of the domestic default tariff cap applies to business energy customers. The Energy Bill Relief Scheme and Energy Bills Discount Scheme introduced during 2022-2023 provided temporary government support linked to wholesale price levels, but these were time-limited interventions rather than permanent price caps. Business energy prices are determined by market conditions and individual contract negotiation.

How can a business check that its supplier holds a valid Ofgem licence?

Ofgem publishes a register of all licensed electricity and gas suppliers on its website at ofgem.gov.uk. The register lists the licence holder's name, licence number, and status. A business can search by supplier name to verify that its current or prospective supplier holds an active licence. A supplier quoting without a licence would be operating illegally under the Electricity Act 1989 or Gas Act 1986.

What is the difference between a supplier and a shipper in the gas market?

In the gas market, the supplier holds the retail licence and contracts with the end customer. The shipper is the entity responsible for booking gas transportation capacity on the National Transmission System and local distribution networks. In many cases the same group entity holds both a supply licence and a shipper licence, but they are legally distinct roles with separate Ofgem licensing requirements under the Gas Act 1986 and the associated Uniform Network Code.

Can a business be refused supply by a licensed supplier?

Licensed suppliers are not obligated to offer a competitive commercial tariff to every business. They can decline to quote, withdraw quotes after credit assessment, or offer terms with deposit requirements if the creditworthiness of the applicant does not meet their criteria. However, under certain circumstances - particularly for deemed supply situations - suppliers have obligations to supply energy to premises within their distribution area even without a signed contract. The Ofgem supply licence conditions set out these deemed supply obligations.

Are energy brokers regulated by Ofgem?

Energy brokers are not directly licensed or regulated by Ofgem. The obligations relating to brokers in the non-domestic market are placed on suppliers through the supply licence conditions, particularly the microbusiness broker commission disclosure requirements. Industry bodies such as the Energy Brokers Association operate voluntary codes of conduct, but there is no statutory Ofgem authorisation process for brokers equivalent to FCA authorisation in financial services.

How we verified this

This article draws on the Ofgem licensed supplier register published at ofgem.gov.uk, the Electricity Act 1989 and Gas Act 1986 as published on legislation.gov.uk, Ofgem's supply licence standard conditions, and Ofgem's published documentation on market structure and TPI obligations. Supplier names are drawn from the Ofgem licence register. No aggregator, broker, or comparison site content was used as a primary source.

Sources

• Ofgem: Licensed supplier register - ofgem.gov.uk
• Electricity Act 1989 - legislation.gov.uk
• Gas Act 1986 - legislation.gov.uk
• Ofgem: Energy supply information - ofgem.gov.uk

For more on what happens when a business supplier fails, see solr-supplier-of-last-resort-business. For microbusiness-specific protections, see microbusiness-energy-rights-uk.