SSE mulls ditching the domestic energy market

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Will the Big Six be no more? (Source: Getty)

One of the UK's top power providers is mulling an exit from the domestic energy market to focus on networks and renewable energy as the government readies plans to cap energy prices, according to reports.

SSE, one of the Big Six energy suppliers, is considering plans to sell its customer accounts or split and spin off the business as a separate listed company, the Telegraph reported.

The move comes just as the government is firming up plans for a cap on standard variable tariffs, with draft legislation published last month proposing an absolute price cap running until at least 2020.

The energy cap is expected to hamper profits at Big Six suppliers in particular as they tend to make a larger chunk of money from standard tariffs.

"At this stage the business is more trouble than it's worth," an unnamed investment banker told the Telegraph. "The management team spends 85 per cent of its time with investors answering questions about the energy price cap, when it only affects 15 per cent of their business."

SSE, which supplies gas and power to around 8m homes in the UK, makes the bulk of its profits from its networks business and wind farms.

SSE declined to comment.

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Tags: SSE