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Greg Barker: Can government fix our energy problems?

The Conservative Party conference is underway – the last of the season – but what does our government think about energy tariffs, energy suppliers and renewables? We spoke to Greg Barker to find out.

The cost of energy is UK consumers’ number-one financial concern, and prices are set to increase again this winter. What action can the government take to stop a new wave of people falling into fuel poverty?

The most effective thing people can do is to make sure their home is properly insulated, after all, the cheapest energy is the energy we don’t use. That’s why the coalition is introducing the Green Deal. Developed by the Conservatives in opposition, it is the biggest home improvement scheme since the second world war. It will improve value and save people money.

Consumers are confused about which tariff, let alone which supplier, offers them the best deal. Suppliers claim simplification of the pricing system will stifle innovation and competition. What’s your stance on reducing tariff complexity and improving comparability?

Tariffs need to be clearer and people need to know what they’re paying for. Ofgem is doing a lot of work in this area, and as a government we are strongly encouraging the regulator to use its powers to tackle barriers to competition. The Ofgem proposals aimed at reducing tariff complexity and improving comparability should make it easier for consumers to navigate the market and find the best deal.

Do you have plans to take advantage of public subsidies, such as feed-in tariffs and the renewable heat incentive, and generate your own electricity at home?

I undertook a lot of energy efficiency improvements in my last home and I am hoping to be one of the first to take up the Green Deal when it is launched next year. I’ll be looking at energy efficiency measures first, then microgeneration.

Do you believe energy companies when they say price rises are largely determined by factors beyond their control?

The uncomfortable truth is that Britain’s consumers are subject to the volatile nature of global fossil fuel prices. That’s why we’re pushing the big six suppliers to help their customers overhaul their draughty homes and understand the best tariffs on offer, and we’re backing new entrants to bring more competition to the market.

The UK electricity market has to change to make way for alternative forms of power like renewables and nuclear. Only radical reform will give us the best chance in the long run of keeping the lights on at a price that doesn’t wreck our economy over and over again.

Do you think that the practice of doorstop selling of energy products should be allowed to continue?

Responsible doorstep selling has proved to be a useful way of bringing the benefits of energy competition to the attention of consumers. It is important, however, to provide consumers with proper safeguards. Ofgem has already brought in rules that require any information used during the doorstep sales process to be complete, accurate and not misleading. It is for Ofgem to investigate any allegations of the rules being breached and to take any necessary action.

What next for the Green Deal?

We have to iron out the detail of how the scheme will work to make sure people can trust the products, the installers and the whole Green Deal experience. Strong consumer protection will be at the heart of the scheme. We’re hoping the first Green Deal will be available in the autumn next year.

Do you think the government is responding to our energy concerns in the right way? Is enough being done to improve the energy suppliers? Are you keen to take advantage of the Green deal?

Comments
Member

“Do you believe energy companies when they say price rises are largely determined by factors beyond their control?

The uncomfortable truth is that Britain’s consumers are subject to the volatile nature of global fossil fuel prices. That’s why we’re pushing the big six suppliers to help their customers overhaul their draughty homes and understand the best tariffs on offer, and we’re backing new entrants to bring more competition to the market”

QUOTE: British gas on their August price rises;
“… the rise in our prices, in part is due to lower consumption”

Energy saving trust, british gas and the department for energy and climate change, have not a single comment to make on this point!
Other “big six” energy companies also avoid answering when I ask them.

Is it any wonder that the public are sick to the back teeth of being taken for a ride and do not trust a word of the 100% flannel we are being fed over the price of energy we need for our homes.

Member

frugal ways,
I completely agree. Much of the spin we get is a complete insult to our intelligence and the level of scepticism in the public is increasing by the day.
Fact is we are being turned over and all we can do is take up every energy saving measure we can just to stand still financially, and still probably won’t.
I am very much in favour of re-nationalisation of energy so that profit can be ploughed back into free efficiency measures and lower prices.
I disagree with those who argue private competition is better. A six company cartel with fat cat shareholders is hardly competition, or beneficial to the economic health of the country as a whole.

Member
Rural energy user says:
4 October 2011

Has no-one pointed out that profit margins doubled after “de-regulation” ten years ago?

Re-regulate the entire industry so that we have one fair tariff (instead of ?200 excessive ones) one supplier.

Then force the utilities to invest in energy efficiency on consumers’ premises as happens in some of the USA.

Incidentally my LPG is even less regulated than gas and electricity and the price is twice that of gas. DECC seems to have forgotten that 15% of consumers aren’t even on the gas mains.

Member
Steve says:
4 October 2011

I am in a dilemma about using solar panels. I have the ideal location; single story extension with south facing pitched roof with no shade. However, to take advantage of the FIT scheme I would be looking at a payback period of around 25 years. At the age of 65 this obviously doesn’t interest me. The alternative Rent-A-Roof scheme is also not an option since if I wanted to downsize to a smaller property or, God forbid I move to a care home, then there is potential for legal complications for prospective buyers with regard to the contract. So much as I would be delighted to install PV panels, and help save the planet I’m afraid, in the words of Dragons Den, I won’t be investing – I’m out!

Member

Steve,
I can completely understand your delemma regarding Solar panels (I’m assuming you refer to electricity generating PV panels rather than Solar hot water).
The payback on the original investment won’t be as long as 25 years, but still a long time (probably 10 to 12) before you’re in profit.
Basically you invest around £12,000 for a 2.5Kw to 3Kw array. You’ll get about £1000 back each year via the feed in tariff.
So over the 25 year life expectancy of the system you will save on Co2, reduce your electricity bill and make money. And your saving will in effect increase as electricity prices go up, and they will.
However there are “buts”
At 65 now you’ll be 90 by time this little investment concludes.
The inverter probably won’t last the full 25 year term so you’ll need to budget for another £1000 to £1500 sometime during that period.
You will be locked in to this deal once you buy the panels say goodby to that £12,000. It’s not like you can cash in or change your investment. All you can hope for is to realise some of the value if you sell your house at an enhanced price based on the fact the panels are there.
If you invest that £12,000 somewhere else I’ve a feeling you would do just as well and have an exit if you want, we won’t I hope be in recession for 25 years.
So all in all Solar PV is not a bad deal but it won’t be for everyone and the rewards will not be as good as the sales person tells you.

If you go for Solar hot water you’ll need to reach “telegram from the Queen age” and well beyond to see a packback. But it does work and it does save Co2.

Hope this helps.

Member
DaveG says:
5 October 2011

I read in the papers this week that oil has dropped below 100$ a barrel,but will we ever see any benefit? I doubt it.Looking at Electricity and all the wind turbines that are now operating,and the solar panels,where is all this extra power going to and is it reducing the cost to us.As an OAP I cannot get involved with solar panels so would like to think that one day there might be a reduction or are these schemes just making more profit for the big 6.