The deal to merge Npower and SSE’s retail operations has been given the provisional green light after the energy watchdog said there is “plenty of choice” in the UK market.

The Competition and Markets Authority (CMA) dismissed fears that it would have an impact on the most expensive deals as its inquiry found the providers – two of the Big Six in the UK – do not compete closely on standard variable tariffs (SVTs).

There had been initial concerns that the tie-up would affect these tariffs – the most common and expensive energy deals.

Anne Lambert, chairwoman of the inquiry group at the CMA, said: “With more than 70 energy companies out there, we have found that there is plenty of choice when people shop around.

“But many people don’t shop around for their energy. So, we carefully scrutinised this deal, in particular how it would impact people who pay the more expensive standard variable prices.

“Our analysis shows that the merger will not impact how SSE and Npower set their SVT prices because they are not close rivals for these customers.”