SSE loses more customers in cut-throat UK energy market

* Gas, electricity customer numbers fall to 8.16 million

* Maintains EPS target of at least 120 pence for 2016/17

* Thermal power plant output nearly doubled in Q1

* To lobby for energy market harmonisation, carbon pricing (Updates throughout)

By Karolin Schaps

LONDON, July 21 (Reuters) - Britain's second-biggest energy supplier SSE (LSE: SSE.L - news) said on Thursday it had lost another 50,000 power and gas customers over the three months ending June 30, as small suppliers continue to grab market share from incumbents.

Britons have grown increasingly dissatisfied with high bills and poor customer service, with the competition watchdog finding some households overpaid a total of 1.4 billion pounds a year between 2012 and 2015 on uncompetitive tariffs.

SSE said total household customer numbers fell to 8.16 million at the end of June from 8.21 million at the end of March.

"It (Other OTC: ITGL - news) 's an intensely competitive market with more than 30 suppliers competing for customers," said an SSE spokesman.

SSE shares opened 0.3 percent lower in London.

The "big six" suppliers have seen their market share drop to 84.6 percent in the dual-fuel (gas and electricity) market, compared with 99 percent four years ago, according to data from consultancy Cornwall Energy.

Britain's largest energy supplier British Gas, owned by Centrica (LSE: CNA.L - news) , lost as many as 224,000 customers between January and March.

Small suppliers including First Utility, Ovo Energy and Good Energy often offer lower prices, attracting new customers.

Despite the customer losses, SSE maintained its earnings per share target of at least 120 pence for the current fiscal year.

Its gas and oil-fired power plants nearly doubled output to 4.4 terawatt-hours (TWh), up from 2.4 TWh, but poor weather reduced green energy output 31 percent year-on-year to 1.5 TWh.

This reflects improved profitability for thermal power plants thanks to weak gas and oil prices after these plants had been struggling to make money in a market of growing renewable energy output.

SSE also confirmed its intention to sell up to a third of its 50 percent stake in regional gas distribution business SGN, with a sales process now under way.

Angelos Anastasiou, utilities analyst at Whitman Howard, estimates a third of its stake could be worth 500 million pounds.

The energy company, which also supplies customers in Ireland (Other OTC: IRLD - news) , said it was continuing to assess risks to its business associated with Britain's decision to leave the European Union.

It said it would lobby the British and Irish government and EU institutions to continue energy market harmonisation and to implement effective carbon pricing policies. (Editing by Mark Potter)