THE electricity supply industry faces a period of considerable turmoil over the next few years with the probability of a severe fall in the number of participants by 2005.

At present, there are 15 suppliers in the #9000m-a--year consumer market but a study by Coopers & Lybrand raises the possibility that this number may be reduced to as low as four.

The interviews with 14 directors from existing public electricity supply companies point to the increasing competition with some suppliers looking just to maintain their current customer base, others to grow share by over 20% annually which implies an increase in the market overall of 50% when the underlying trend is just 2%.

At the same time, there are up to 30 new entrants jostling to enter the scene with British Gas seen as the most potent although PowerGen is also potentially a major player.

Although some of the directors believe their companies could sustain as much as a 30% loss of customers, it is generally thought that within two years, mounting losses would lead to consolidation.

Coopers said that there is a high acceptance of both gas and electricity being delivered in the same package although there was less acceptance of other services such as telecoms, home security, financial products and insurance being included.

But water is seen as a poor candidate for inclusion in the bundle of services, with some people believing, apparently, that water and electricity do not mix. That will be contested by ScottishPower which owns Southern Water.

The Glasgow-based company and Eastern Electricity are seen as being the two winners with Norweb, Southern Electric and Northern Ireland Electricity (now called Viridian) as the three likeliest runners-up.