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What can the government do now to help with energy bills this winter?

Turning on the heating

It’s now three months on from the biggest inquiry into the energy market since privatisation, so as the colder weather starts to set in Which? has set out some ideas for the government to help on energy before the winter bites…

The Competition and Market Authority’s (CMA) two-year inquiry clearly revealed how the energy market isn’t working, particularly for those with prepayment meters and customers who remain on the big energy suppliers’ expensive standard tariffs.

After years of price hikes, dire customer service and falling levels of trust, it’s clear that big improvements are needed. The CMA’s proposals to try to tackle these failings will inevitably take time to test, get right and then introduce.

So the energy regulator, Ofgem, will need time and space to introduce the inquiry’s reforms. But still there’s plenty the government can do now to help those who will struggling with their energy bills this winter.

Helping energy bills

It’s time for the government to be turning up the heat on energy company bosses. With 70% of energy customers sat on poor value so-called ‘standard’ tariffs, these energy companies should be genuinely competing to win and keep their customers, getting them engaged and switching to better deals, all the while delivering a much higher standard of service.

Indeed this was one of the inquiry’s recommendations, but the energy industry shouldn’t be waiting for the regulator to force them to do it. It should be doing it now.

The government should also be holding Ofgem to account for the reforms it introduces. Which?, like many others, is sceptical about whether ideas like an energy database to share customer details and prompt switching can bring about real change.

Just introducing these remedies isn’t enough- what we need is for the regulator to explain what good consumer outcomes look like and put in place metrics to measure progress towards those outcomes.

The government should ​be pressing Ofgem to regularly set out whether the new reforms ​are succeeding and deliver​ing​ a competitive energy market​ that ​not only ​doesn’t harm consumers but actually meets ​their expectations​ of the energy industry​.

Beyond this, the government ​may want to do more to help ​vulnerable customers who won’t benefit from the protection ​that’s going to be introduced ​for prepayment meter customers. But the government must think carefully about the impact any further intervention would hav​e – further help ​will come at a cost, whether paid for by taxpayers or out of other people’s energy bills, so it must be controlled​ and not end up hurting energy customers more than it helps them​.

Next steps for energy reform

In truth, this is the last chance saloon for the energy suppliers. It’s the energy industry itself that now needs to rise to the challenge. It cannot think that it’s got off scot free from the inquiry. It showed we’re collectively overpaying £1.4bn due to a lack of competition.

So unless energy companies prove they can genuinely compete for customers and give them a better deal, there will be no one to blame for further intervention than themselves.

Do you think more can be done to improve the energy market? What more could the government do to help you with your energy bills?

Comments

We’ve just invested in Air con using inverter technology with heat pump systems. Although the move was designed to keep the place cooler during the incredibly hot weeks we can get in summer, because the outside temps are now so cool the system only provides heat. It harvest the outside air and extracts the ambient heat from that.

What we both found fascinating was the amount of hot air the system produced yesterday, almost silently in production and a great deal more cost effective than using electricity or gas. The Government do provide grants for the heating aspect, but not if the system is also capable of cooling. However, they do only levy a charge of 5% VAT on the entire job. Perhaps this is an area that needs examining?

mike.suttill says:
9 October 2016

You do not mention the high capital cost of the system, especially when compared to the cost of gas boilers for standard homes. The whole conversation appears to want to inflict more regulations on everyone through CMA and Ofgem through “the government” rather than fewer regulations. More regulations mean more complicated systems as everyone knows to their cost (personal and corporate tax system). People should generally be responsible for themselves and their actions. Those who cannot help themselves for whatever reason can be assisted but the majority of people are too idle to change their supplier – hence the large number on standard tariffs.

I feel that the CMA skated round the edges of the problems with domestic energy costs so I am not sure why this is the “Last Chance” saloon for the energy companies. So long as we need energy there will be energy suppliers and unless they are much more heavily regulated they will continue to confuse people with complicated tariff structures, obscure bundling of products, exit penalties, and various tweaks to their terms [for example, standing charges, paperless billing] that bear no relation to the underlying economics and merely distort the unit price.

New energy companies come into the market but they are not achieving critical mass because their volume requirements are too low to compete against the major suppliers which also have massive contracts to commerce, industry, schools, prisons, military establishments, government buildings, airports, hospitals, railways, street lighting, and so on. For them domestic energy is a side-show but if any one of the smaller companies did start to encroach on the market of the Big Six they would be taken over just to eliminate the competition. I am not sure whether the government understands all this and its implications but unless these arrangements are broken up there will not be an open competitive market for domestic energy.

If the government is serious about bringing fairness into domestic energy supply it needs to demonstrate that by progressively rolling back the various levies and obligations that are loaded onto energy prices and put them where they belong – in general taxation. These levies overbearingly impact on poorer consumers and those with higher energy needs; they are a very regressive form of taxation. And much more thought needs to be given to how to help people in hard-to-heat homes that cannot easily be modified so are paying disproportionately for their warmth – it is not always a matter of choice and alternative cheaper fuels are not always available.

I should have added the wasteful cost of smart metering which is clearly becoming a commercial failure as they have had to launch a very expensive marketing campaign to get people to ask for them. Consumers are paying £11 billion for this through their energy bills. Some companies are actually suggesting that having one is mandatory and that they must make an appointment now. I have no idea how they would fit one to my gas meter which is outside the house and not near an electricity supply; we wouldn’t want one anyway.

The misconception is that by making everyone move from standard variable tariffs they would all save around £300 a year. These SV tariffs subsidise the cheaper ones (fixed term, fixed price) so, to maintain profitability these cheaper tariffs would then increase in cost. So let’s abolish that myth. My view would be to abolish the subsidised “fixed price” tariffs and have most on standard variable, but at a real cost. Have other tariffs – no standing charge, two tier, day/night – for those whom they best suit.

We are not overpaying by £1.4 bn. Annual profits from memory were £6-700m so clearly we cannot pay £1.4bn less.

Ofgem are currently investigating prepayment meters to get normal tariffs for those who choose to use them. Where prepayment meters are imposed on people who don’t pay their bills, then restrictions may apply. Which? could tell us about these; information is available on the Ofgem website.

Energy bills should go back to basics and reflect those direct costs associated with administering, supplying and delivering energy. The Government “taxes” added (other than vat), for “levies, environmental charges and subsidies etc) should be removed and paid for out of general taxation.

We need a single switching site that shows all energy companies and all tariffs with no commissions for switching. I’d see this run by a non-commercial organisation. Why not Ofgem?

Finally, as John says, this is not, of course, a “last chance”. We can continue trying for improvements in what is a changing industry. We have plenty of smaller suppliers who are competitive if only people want to save themselves money.

That’s my manifesto 🙂

I have been reading and re-reading this paragraph from the Intro :

It’s time for the government to be turning up the heat on energy company bosses. With 70% of energy customers sat on poor value so-called ‘standard’ tariffs, these energy companies should be genuinely competing to win and keep their customers, getting them engaged and switching to better deals, all the while delivering a much higher standard of service.” Leaving aside the unnecessary words “sat” and “so-called“, what is this “higher standard of service” that is being called for? The quality and consistency of our gas and electricity does not seem to vary, it seems to be available round the clock in whatever quantities we need, we do not have to go outside and fetch it indoors in a bucket, and there is no gold-plated version for richer consumers. So I am struggling to comprehend this entire paragraph, and when I come across phrases like “genuinely competing” and “getting them engaged” I start to despair of any sense emerging on the real problems.

Tabloid (political) journalism, John. I’d like facts, not rhetoric. Proposals, not gripes. From Which?, that is.

I keep hoping that they will put forward well researched, well argued cases taking help from experts when looking at how to change for the better. But that is demanding on time and expertise. Perhaps they should run their proposals through Which Connect first to see what Which? Members (who are the essential funders of Which?) think and what they might suggest before going public?

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Not sure what you mean duncan.

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Duncan, I think I am even more baffled now. My point was that much of it is just waffle and has no meaning, inner or otherwise. The fact that Americans like it is no justification!

I suspect duncan meant waffle words as well. I like to see plain straightforward language. Don’t always practice what I preach
🙁 . However when a serious argument is being put forward it should be well thought through and not dressed up with “marketing speak”. We had a less polite description of such words and phrases.

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Hello all, thank you for your feedback, I’m sorry that you feel this way. The intention of this convo is to strike up a discussion about energy as we enter the colder months of the year, we’ve had a lot of energy convos recently that have been focused on one or two issues, what we were hoping for was to simply hear what you think the government could be doing to help you with your energy bills. We’ve outlined what we think and these are some of the key messages that we’ve been talking about recently. It would be great to hear more about what more you think could be done, this is just one way we’re gathering your views on energy. Nonetheless, I do take on board your feedback – thank you

@ldeitz. Lauren, there has been a good contribution of positive suggestions. However I might not be alone in asking for more careful intros. There are a number of assertions made that many may take at face value, because Which? are the contributor. But some, as I mention above, are dubious or not totally correct. We need unbiased information to avoid misleading contributors.

The intro says “After years of price hikes, dire customer service and falling levels of trust, it’s clear that big improvements are needed. ” I looked at my energy cost over the last three years based on the suppliers I have used, and identical energy use. I have been prepared to switch andcareful to choose the cheaper fixed term deals; I am this year paying 30% less than 3 years ago. My case is nothing special, unless I am unique in shopping around, so the “price hikes” appear not to be general for everyone, or at least avoidable.

It is clear that many consumers are simply not sufficiently bothered about the amount of money they could save to make a switch, despite knowing what to do and how to do it.

Energy is energy – it does not matter who supplies it. As John said, it is does not come in high or low quality. It seems to me the main criteria are how far the energy must travel to your home, as this seems to affect transmission charges, whether you are prepared to pay a smaller or larger standing charge, and whether you might use a lot of off-peak power at lower rates. If you are “Green” you might be prepared to pay more to support renewables. I think these should be among the basic criteria for setting tariffs and the “fixed price deals” should be abolished; they are subsidised by those on standard variable tariffs which is unfair. The main tariff should therefore be based on a variable energy cost. Some may disagree, but my point is we should be highlighting what we regard as a better, fairer way of charging for energy, agree on the basis, and then campaign for that through Ofgem. Although the retail market review is pretty near a conclusion that does not mean it cannot be modified.

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I endorse what Malcolm has said. Over the several Conversations there has been no shortage of suggestions as to what the government should do to put the energy market right. There is a sense of frustration on my part that despite the intelligent and informed contributions from many correspondents that generally point in the same direction, Which? has appeared to be quite indifferent and shown very little support for any of the proposals that would make life better for the majority of consumers. Moreover, Which? has made very few original contributions to the debate apart from a few opportunistic outbursts on populist issues [which were nonetheless valid in principle, I hasten to add]. This Conversation criticises energy suppliers for not engaging with consumers, but Which? has hardly engaged with its subscribers either, other than in a tangential way. I find the lack of dialogue with Which? in the Conversations quite disappointing, as there are opportunities to introduce facts, or challenge assumptions, ask questions, and feed in information that would improve the context in which we are commenting.

Anyway, moving on, I think this is a good opportunity to round up all the various ideas that have been put forward, over the last two years or so, prioritise them, and put them forward as a consumers’ manifesto to the government and Ofgem for attention. The CMA’s two-year-long review isn’t the end of the debate; it is really only the beginning because there are still several serious problems that have not been given much time or space in the media or political circles and they remain in the ‘too difficult’ tray. It’s still early days for the new PM’s approach to be gauged but she did mention reform of the energy market as one of the big challenges in setting out her stall at the Conservative Party annual conference yesterday. That might indicate that the she recognises – with one eye on 2020 as ever – that the last few years of posturing and fancy-dancing around the issues have not achieved the right outcomes for most voters and especially those on low incomes or with all-day heating requirements or with hard-to-heat homes [and sometimes all three]. So there is potentially a window of opportunity to look beyond the CMA review and Which? should play its part in that.

I should like to know whether Which? supports the suggestion of making available a list of all those households on a standard variable tariff to all energy suppliers so they can target them directly with mailshots. Without counting all the responses I would say this was opposed by most who commented on it in the previous Conversation. I should also like to know what Which? feels about the imposition of VAT-attracting government levies on energy bills which are widely acknowledged to be regressive in their impact. There are lots of other aspects that Which? should speak out on in the overall interests of consumers, like the smart meter roll-out, the winter fuel payment, and the vertical integration of the big energy companies that disadvantages newer entrants to the market, to name but a few.

There is one question that has routinely sparked conflicting views and that is standing charges. In this case an intelligent and responsible debate led by Which? might enable consumers to develop a policy that is equitable, honest, transparent and trustworthy and where the costs and charges are independently controlled on a sustainable formulaic basis. Perhaps Which? does not wish to go this far and only wants to react, or ask its members about it.

I support Malcolm’s proposal for abolishing the fixed-price tariffs with their long contracts and exit penalties even though I am on such a tariff at present. I don’t think there is any place for cross-subsidisation in the energy market – there are already enough perks available like discounts for paperless billing, direct debit, and dual-fuel [of which the latter discriminates against people who only have mains electricity]. Every time there is a discussion on the energy market the cry goes up for a return to nationalisation . . . and it is easy to see why even though many of the protagonists have no idea how expensive and inefficient that was. At least the deal was simple and universal within each gas or electricity board and the bill was easy to understand. I think that is what people wish to return to: a service where we don’t need to wrangle with comparison sites [in which Which? has a vested interest, let’s not forget] that are not without serious flaws and are taking money out of the market, as does excessive switching because of tariff instability, of course, and the one feeds off the other.

Thanks for your response on ‘marketing speak’, Duncan – I do recognise it when I see it and in general I feel it is best left in the world of marketing. I am afraid I cannot agree with you on the need for a Which? article on a serious subject to descend to that level. While I do agree with you that Which? should project a modern image, I cannot accept that that means it should attempt to mimic American usage, nor that the American way necessarily appeals to the younger generation except in a few specific areas. Which? is predominantly for adults over twenty-five who, in my experience are much more international in outlook. Sadly we have embraced too many American brands because we have been too lazy to learn other languages or experience other lifestyles, but things are changing now, especially in drama and cultural influences. Which? is also predominantly for a UK audience and I would suggest that it’s reputation is not helped by diluting its appeal in that direction. I certainly don’t think we need to take lessons from the Americans on the use of our mother tongue.

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I completely disagree with you Duncan. The TV schedules in the 1950’s and 60’s were dominated by trashy American shows [“I Love Lucy“, “The Dick Van Dyke Show“, “77 Sunset Strip” and many others] and Hollywood movies, then Dallas and Dynasty, Hawaii Five O, and many Westerns. Today, the American content is a fraction of previous decades. Every week there are several highly enjoyable travelogues with British presenters [Michael Portillo, Joanna Lumley, Trevor MacDonald, etc] and documentaries about other countries, as well as wildlife, history, science, culture, arts, music, and architecture programmes. There are also plenty of [some say too many] political programmes with debate and analysis covering UK and overseas stories.

There is not a night when we cannot find an absorbing programme to watch on the mainstream channels and there is also an innovative strand of new British comedy that is winning audiences, does not rely entirely on offensive language, and is actually quite cerebral at times. There is no question that the current popular UK TV drama productions are world-beaters and we also have the chance to watch some of the best productions from Scandinavian and other European producers. Our PVR is loaded with dramas, documentaries, and educational programmes that we have not yet had time to watch but will catch up with one day whether it’s the Battle of the Somme, the ancient history of Egypt, the Roman Empire, China, or Italian Islands. And if the UK film and broadcasting standards are so dire how do you explain that so many actors, comedians and production personnel are a vital part of American productions? Even our chat shows knock spots off the American ones. Yes, there is a a lot of rubbish on TV here, but it is not compulsory viewing and is a minor portion of the mainstream output, so I am afraid I think your wild generalisations are very wide of the mark.

Agreed John. We can usually find an interesting or genuinely entertaining programme to watch, but of course we need to be choosy – we don’t have to watch tv all the time if there is nothing on worth watching, do we. From the USA, Mash is still a programme I enjoy after all these years, just as I find our Dad’s Army unmissable.

What, I suspect, colours our judgement about the quality of programmes is the huge number of channels now available, the vast majority churning out rubbish. However if you scan the BBC, some ITV, Dave Yesterday, some Quest, Parliament and, of course the News there is usually something to tempt. Less good during the daytime, but are there not better things to do when its daylight? I am currently reading some John le Carre and Private Eye.

Does anyone find, like we do, that whenever you change channels to see what is on we invariably find we are at the start of another lengthy session of adverts? Perhaps we could simply have one channel just devoted to them and stop them spoiling our viewing?

The advert thing is interesting. Some years ago the government’s watchdog changed the rules to allow 20 minutes of ads per hour of viewing, so the progs are actually 40 minutes long. And they’re not the money maker they once were: many companies are stopping TV ads because the evidence is that time-shift viewing is now the predominant factor, and folks are cutting the ads out. Ad firms are increasingly looking to Facebook and the like.

I like your adverts suggestion, Malcolm. That’s why we rarely watch any commercial stations in real time. Watching a programme via the PVR fifteen minutes later than from the start means we can zip through the adverts and end up in synch by the time we might wish to change to another channel. I am glad HIGNFY is back.

I’ve just read through this discussion, and I think you may be talking about something that few people in this whole debate have addressed: there are people who don’t “engage” with the energy market because they don’t think there should even BE a market. They don’t see why duplication of the effort of meter reading and billing, and the cost of advertising etc. etc. is thought to provide the most efficient way to get a standard product (the supply of which is actually done by someone else) into people’s homes, and they don’t want to spend their valuable time looking at tariffs, and weighing up prices vs. service ratings, and deciding between fixed and variable rates, and wondering whether they really want to end up £100s in credit, and then worrying about whether they’ve chosen the best deal, only to be expected to do it all again next year.

Jenny, you are right, I’m sure, that there are some who feel this way. They have the choice to do nothing but that will be to their financial detriment unless and until the market might change to their liking.

The amount of time it does take to change, as you say once a year, is relatively little, particularly if you use Which?Switch, compared to the initial savings you might make.

There are practices I might disapprove of that save me money, but I gain nothing by avoiding them. If I can reduce my AA charge, car insurance, get a better energy tariff, a discounted home appliance then I will until these practices change for the better.

Comment duplicated .

We have to improve the insulation on houses and buildings.
Good insulation will remove the need for as much energy to heat our homes and public buidings.
So grants for all to improve the housing stock.

I entirely agree, Elliott. And we need a less prescriptive specification for eligible works – some properties are just not capable of being insulated to the standards required at a cost commensurate with their condition and life-expectancy, so worthwhile improvements are not being carried out because they don’t tick every box. Even partial insulation can make a significant difference together with economical measures like draught-proofing, internal lining, and more efficient heating appliances. The payback is reduced energy demand and lower carbon emissions, and an improvement in the condition of the housing stock making it more habitable; it could also prolong the lives of some of the people who suffer in poorly-insulated homes and take some pressure off the health and welfare services.

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No, Duncan, it’s not too controversial. We had some very impassioned Conversations a few years ago about the pros and cons of wind-farms, both on-shore and off-shore, and solar heating has also been well debated. So I am in favour of a Conversation about hydraulic fracturing [‘fracking’].

The fracking topic goes to the heart of the UK’s energy policy because it has the potential to reduce significantly the price of raw energy and reduce the reliance on foreign energy imports [but not dramatically without massive upscaling]. However, it also does have environmental implications and raises concerns about groundwater contamination and the risk of earthquakes, among other things.

The grounds on which Lancashire County Council rejected the planning application [Little Plumpton] were noise and traffic impact – the council did not rule it out for any other reasons whether technical, environmental or political. As I understand it, following the public inquiry opened as a result of Cuadrilla’s appeal against refusal of planning permission and the production of more up-to-date evidence than was available to LCC, the Secretary of State was satisfied that the noise and traffic objections were not strong enough to justify refusal of planning permission. So, we are led to believe that the decision has been made solely on planning grounds. It is convenient, of course, that that outcome aligns with government energy and national infrastructure policies. However, the Secretary of State did not approve a second application [Roseacre Wood] because of concerns about the local impact.

A particular feature of the proposal in Lancashire is for horizontal drilling to access the gas reservoirs located between the shale rock and other strata and the concern is that there is less experience with this process and that it is potentially more disturbing to the environment than vertical drilling. It is far more productive, with horizontal bores extending outwards radially to 1 km from the drill head. It requires fewer headworks but the main drill head has to be a much larger installation attracting vehicular deliveries in a much more concentrated area so it would appear to be a lot more industrialised use of the site.

The historical county of Lancashire was one of the birthplaces and powerhouses of the industrial revolution with its extensive collieries, quarries, chemical works, mills, and manufacturing plants, including some of the dirtiest and most hazardous types in the country. Many have declined but it still hosts a nuclear power station and many other major industrial complexes. No doubt the population feels that the county has made its contribution, and suffered the consequences, and should now reject the intensification of the exploitation of subterranean resources on those grounds alone.

Personally I have no objection in principle to shale gas fracking so long as equivalent controls and protections are applied to it as are applied to nuclear power generation, and in fact there are extensive UK and EU regulations already in place [although they might not be rigorous enough]. It is interesting that the GMB trade union has accused the Labour Party of ‘madness’ in pledging to ban fracking. Additionally, the National Trust and the RSPB have not opposed fracking but have called for strong controls and protections and are especially worried about the industrialisation of the countryside as the sites so far identified are virgin greenfield locations.

This subject is controversial because if we do not have fracking we might have to have something that people think is even worse in order to secure our baseline energy needs.

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It’s something about which I haven’t really thought but since our youngest is heavily involved in energy distribution I might ask his views. It does seem to offer reasonably accessible energy although whether the end user will ever see ‘cheap’ energy is I suspect, something rather doubtful.

Seems it’s a contentious field, doesn’t it? Just been sent the New Scientist leader which seems heavily against fracking for several reasons. They boil down to these:

1. We already have far more fossil fuel than we can afford to burn. If we are serious about tackling climate change, we have to leave most reserves underground.
2. It’s true that if shale gas were used to replace coal, it could reduce emissions and act as a “bridge fuel” to renewable energy. But shale gas is not going to replace coal in the UK, because the country is on course to meet its pledge to phase out coal by 2025, well before shale gas production begins in earnest.
3. Over the past summer the country got more of its electricity from solar than from coal.
4. There is a risk of water supplies being contaminated by fracking wastes, as has happened in the US.
5 Fracking might not even be economically viable if gas prices remain as low as they are.

I’ll see what the pros are now.

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Future generations will need the shale to make plastics, pharmaceuticals and many other products that we take for granted. Renewable energy could make a greater contribution to our energy needs if we get the balance right rather than focus on wind power, which is not dependable.

Or don’t we care about future generations?

Yes, Wavechange – that is the most important point – you can only take the gas once. And it is still a fossil fuel. It is not a producer of ‘green energy’.

I was hoping my previous comment would not be seen as an argument in favour of fracking as I included various balancing factors, but I thought I should make my personal attitude clear that I have no objection in principle subject to controls. I agree with Malcolm’s comments below which have arrived while I have been writing this.

Now that planning permission has been granted it becomes a commercial and logistical development rather than part of a rational energy strategy. The government is in a corner and fracking is an opportunistic way out. While coal-fired power generation will end by 2025, there is not an orderly run-down and facilities are already closing ahead of a neat timeline as the economics of a reduced industry affect coal importation, transport and production. Some companies are prepared to pay penalties to exit their supply agreements rather than maintain uneconomical power plants in operation. So there is a looming baseload energy gap given that new nuclear plants keep shifting to the right on the development schedule. Fracking looks like a convenient way of plugging that gap, but, as Ian points out, we are many years away from a time when shale gas output will be enough to replace lost coal-fired production – if only because initially UK shale gas will merely substitute for imported gas if the economics so dictate. New gas-fired power plants would be needed to generate electricity. Volume production of shale gas on a significant scale and the associated power plants would require many sites each with their own opposition and planning hurdles.

I think shale gas is likely to produce cheaper electricity but by the time we get there the difference might be less than the current forecasts. In terms of energy bills this could be a positive, and could offset the negative from the Hinkley Point C nuclear plant where the government has kindly allowed EDF to charge a much higher price per megawatt of output than other sources in order to recover the cost of their investment.

I agree with Wavechange that it would be better to forge ahead on renewable energy sources. There is potential in wave power to derive energy that is more dependable than from sun and wind. Solar power is daylight-limited and not sufficiently productive when heating demand is greatest. Wind power requires enormous over-capacity in turbine arrays and many dispersed locations in order to harness sufficient power given the variability of windforce off our coasts [thirty miles off the Norfolk coast in the latest proposals]. I feel that the economics of wind power are becoming unviable as the infrastructure for its collection and transmission becomes ever more complex and expensive. Moreover we are probably reaching the natural limit of reductions in electricity demand from energy-saving initiatives, especially as we electrify the railways, install air-conditioning, run electric road vehicles, and increase the population.

It will take time to get more reliable renewables, such as wave and, particularly tidal, power – the latter with all the planning and vested interests to overcome. They offer predictable green outcomes with the golden benefit of “creating jobs”. In the meantime we need fossil fuel, and reduced dependence on overseas suppliers and the cost of transporting gas from the USA for example. Coupled with the reduced value of the £ using home grown resources makes even more sense. Providing we monitor the impact as resources are exploited I see no point in avoiding the potential of fracking.

As resources such as metals and plastics become scarcer recycling will become more and more viable. Instead of putting materials into landfill we will find better ways to reuse them. We still have large coal reserves to convert into other useful materials.

Absolutely NO FRACKING!!, there is no need, it is not predictably safe, and unending abundance of ‘new energy’ has been available for decades, but no-one (so far) has had either the guts or the ‘clout’ to take on the interests of those who would lose out, were matters allowed to proceed. There need not be any shortages around our globe, but try telling the liars, thieves, legalised robbers, and all politicians, [ with much due prevarication] who will respond by informing you as to why your ‘thinking’ is all screwed up! and thus no progress can be made toward plentiful, free, and limitless energy available now.
Astonishingly, I know of Professors, who hide, in this country! afraid of retribution for explaining the fairly simple theories behind the energies availble, said prfoessor has been trying for many decades to attempt to prove his arguments to the great and powerful, but these days he is actually compromised in his wishes/intentions because either he or his family would be at risk of early death, by one means or another, any doubters, just check the facts from the US in respect of these allegations.

You’re not related to Duncan, are you? 🙂

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Would you explain the limitless energy source and the evidence for the the threatened professor please? Supported facts are important when promoting a case.

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I try 🙂 But more seriously, I’m really interested in the “unending abundance of ‘new energy’ (that’s) been available for decades”. Do share…

Dr J M Andrews LLB(Hons) (retired) – or may we call you Jane? – while we wait for the evidence of abundant free energy and the threatened professors, can I ask how we in the UK can fill the energy gap that is appearing before us in the early 2020’s without shale gas or something just as controversial. I feel that people who rule it out without giving reasons at least have a responsibility to identify a viable alternative that is ready to go.

Duncan, luckily for us the threatened professors that Jane knows are hiding here in the UK which will make it easier for us to open a communication channel to them and find out what the problem is. It is also best to avoid quoting evidence from US sources for the reasons you have given. I am sure there are reliable reports and studies available in the UK that would enable us to grasp the issues and examine the facts. I think it is fair to say that provided it is honest and truthful you can report evidence here irrespective of whether it came through an official channel. We shouldn’t delude ourselves either that the UK government will be taking much notice of what is said in Which? Conversation so there will be no harm in bringing it forward for consideration.

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Dr Andrews has posted a few comments here today and in one she gave her name and titles but also included her first name. No devious practices were involved.

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duncan, have a look at JM Andrews post. I have also asked what this limitless energy source is.

You didn’t, Duncan; the original poster did, above “Absolutely NO FRACKING!!, there is no need, it is not predictably safe, and unending abundance of ‘new energy’ has been available for decades, but no-one (so far) has had either the guts or the ‘clout’ to take on the interests of those who would lose out”.

There are often stories and articles about ‘endless energy’ devices being concealed by big business and vested interests, and they even dupe otherwise intelligent individuals. But none has ever been found to work in reality. An oft quoted example is the Casimir effect and the Free Energy machine is another (https : // www . youtube . com / watch?v=A25FRpkbDxU). No one would like this to be true more than I but whenever I’ve looked into it it seems that you can’t usually get more energy out than you put in – unless you can get hold of uranium or the like.

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We do have a recurring source of power that could be used as I’ve said in a number of Convos – tidal and wave power of which, being an island, we have an abundance. There is a limit to how much we can harness, the construction costs are high and, of course, some would be upset at where tidal storage would be located. But once built the energy input is non-polluting and dependable.

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Tidal power is not a new technology. There is a working tide mill at Woodbridge in Suffolk [first mentioned in 1170 but in its present form dating from 1792], and a major complex of tide mills at Three Mills in Bromley-by-Bow in East London [with a long history going back to Elizabethan times and possibly earlier, but in their modern form probably dating from 1727 when they changed from flour milling to a distillery;the water wheels are still in position but have been bricked up as a safety precaution.]

The first shale gas well was built in Britain in 1875 and fracking has been used offshore in UK gas fields for over thirty years.

That’s possible, of course. But the thought has occurred that if we were to use tidal power extensively, eventually there might be a pay-back in orbital terms.

Hello all, can I please remind everyone to be respectful of all views, whether you agree with them or not. There’s room for everyone, especially those who play by the rules on Which? Convo – thank you 🙂

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There is a school of thought (quite a large one, in fact) that says we don’t need the likes of Hinckley point, which is going to cost UK consumers an awful lot on the ‘leccie bills. Technology statisticians have been examining trends in Electric car purchases, LED light sales and the move towards the increasingly affordable Heat Pumps. The latter are especially impressive. On the current cooler nights we’re sitting happily ensconced in a warm cosy house which is being heated from the extraction of ambient heat in the outside air. Almost seems like magic, and it’s costing us pennies.

But electric cars can be hooked up to feed back into the grid at peak times, and then recharge from that grid when demand is low. Led lights are coming of age, and cost a fraction of what the old tungsten types did. Yes – we do have far more gadgets than we did, but essentially electricity supplies have to become smarter, sop they can utilise spare capacity effectively.

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Heat pumps generally use electricity to operate them, so if they supplant gas that will be additional generating capacity. Electric vehicles need generating capacity. So if we reduce gas and fossil fuel consumption, more electricity is needed to take its place.

That is right, Duncan. The Scottish Parliament decided to suspend approvals for fracking in Scotland in January 2016. The SNP had proposed a moratorium but stopped short of an outright ban to allow for further consultation and a public health impact assessment. SNP members abstained and the resolution was passed by 32 votes to 29, with Scottish Greens and Liberal Democrats joining Labour to defeat the Conservatives.

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As yet, no examples of this have been found; it’s currently only a theoretical possibility, but anyone with a webcam should routinely use a simple sliding cover over it. Apple webcams have a hardware LED which illuminates when the camera is on, handily, and there’s a simple tool you can download to evade the possibility of being spied upon:

https : // objective-see . com / products / oversight . html

Not if machines are becoming increasingly smarter. Heat pumps using inverter tech are a prime example. They use a quarter of the energy an electric-only heater would use to achieve the same effect.

Heat pumps do this, but if the input energy to operate it is electricity, and the heat pump replaces a gas boiler for example, then there is an increase in electrical generating capacity required. If that is locally produced by. e.g. your own solar panels, and you have storage , then fine, but many may rely on the grid.

Reducing energy consumption by better home insulation, more efficient appliances (as long as we don’t use more of them), heat pumps will help. Other gains would be from industry using energy more efficiently, and being “encouraged” to install their own solar cell arrays. I don’t see much sign of that in my area.

Ironically, however, Gas production requires Gigawatts of electrical power.

I’ll try and take a look at this issue as logically as I can, bearing in mind that I don’t have the expertise of some of the contributors so far.
I believe that one can break the subject down in to several parts:
Where the energy comes from.
Who supplies it.
How they supply it and the way we pay for it.
Our consumption.
Ways in which the consumer can help in production and in energy saving.
Governmental role and political problems.
There are probably others, but these are the ones that come to my mind.
There are no easy answers to the first of these. If we were to mine coal, we could supply electricity almost for ever, but the environmental cost would be so catastrophic to the planet that this is not an option. Burning it underground is also fraught and a technology that needs much refinement, as contributors have mentioned above. So this is not an immediate option.
Renewables are, without doubt, part of the solution, but each has its problems. I learn from someone working in the industry that the life of a wind turbine is about ten years, they need regular maintenance and, of course are vulnerable when installed in a hostile environment –as at sea. He also tells me that they need a wind speed of around 25mph in order to produce a good flow of current. As everyone knows, when the wind drops so does the output.
Solar operates for a maximum of twelve hours a day in our country and in wet weather they don’t deliver. There are also maintenance problems here actually keeping the acreage of glass clean and replacing breakage.
Hydro is strong in Scotland but there are environmental issues. There is a strong lobby against the Severn barrage for the damage it could do to wild life on the estuary. Dams on rivers stop the flow and damage areas below them. Flooded areas are hard to find though there are several good ones in Mid-Wales which also double as a water supply for the Midlands.
Wave power is yet to prove itself. There has been lots of talk about it but no actual final development as far as I know. Things like Hurricane Matthew would also impinge on the practicality of such power production. Capturing water at high tide and letting it out through turbines seems a good idea, although this would depend on the capacity of the reservoir and the rate of flow going out.
Nuclear is very controversial since the by-products are toxic for ever and there have been accidents elsewhere. Sellafield has been known to leak too. The new developments will give us some energy security and it seems that we are burying our scruples with the waste. As a mass producer of energy, nuclear fission is a hard act to beat and, while contained, provides an instant answer to the lights out crisis of the future.
We have three instant batteries. Two in Wales at Dinorwig and Festiniog and one in Scotland, where in around twenty seconds of pulling the plug a major boost of electricity enters the grid until the top water reservoir is empty. These are an amazing feats of engineering and a visit to any leaves a lasting impression.
Gas and oil are finite and politically sensitive since taps can be turned off and supplies need controversial methods of production. There is a lot of discussion about fracking here. It has turned America around and seems to have poisoned some of it in exchange. Worries about water and earth movements abound. Like others in this conversation I would like to see a test site up and running for a couple of years to see what actually happens. Reliable energy is something we need in this volatile world of ours. Nuclear gives us this at a price, so would local gas, burning which, of course, gives us pollution.
In other countries some housing is heated communally especially where there are natural sources of heat from the water underground. No one seems to be talking about a fuel cell in the back garden, just under the bonnet of a car. There has been talk of a super battery that uses positive and negative charges from natural elements to produce a current. Just talk so far. Portable electricity is a holy grail that would change the energy scene for ever. A way of storing it in enough quantity would also do the same. Those in the future will look back on this time as one of crude solutions and the beginnings of a new age, just as we did at the turn of the last but one century.
The government seems to be adopting a pragmatic approach. We get what we need and we balance this with the environmental impact of our demands as best we can. We seem to be developing along a broad front using all power sources available in various proportions, but we don’t seem to be making much progress in new science thinking. I do hope that things are going on in labs and universities that will make a difference.
Having scratched the surface of what and where, I’d better cease for now and come back later if I have time.

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“Capturing water at high tide and letting it out through turbines seems a good idea”. In and/or out. This is proven technology, but not cheap. Estuaries or lochs provide the reservoirs.

There are two things you haven’t mentioned, Vynor. The first one is the increasingly common approach in Holland where serverlets (small bits of server farm) are being installed in houses to provide heat. Computer systems require a lot of cooling and one way to achieve that is to use ‘serverlets’ to heat homes and water. Certainly, it’s going well in Holland, anyway.

The other factor is Nuclear fusion. Twenty years ago the Jet project announced it would be available within 20 years. Well, obviously that hasn’t happened, but they’re making progress all the time and sooner or later one of the many international teams chasing the grail is going to find a way of producing a self-sustaining fusion reaction. That will revolutionise energy production, rendering conventional fission plants obsolete at a stroke. Since it runs on sea water, essentially, fuel supplies are unlikely to run out. The long term aim will be to provide small, portable fusion generators.

More on Nuclear Fusion: The Wendelstein 7-X research device first run at Max Planck Institute for Plasma Physics (IPP) in Greifswald was successfully concluded in March this year. At mean plasma densities the physicists were able to measure temperatures of 100 million degrees Celsius for the plasma electrons, and 10 million degrees for the ions. They held continuous operation for six seconds, which might not sound much but is far better than anything achieved this far.

The ITER in France should be operational by 2022 of thereabouts, and these technologies are pushing the boundaries of what’s currently possible.

Totally brilliant Ian. Bring it on. I wonder why the government don’t see this as a way forward. Perhaps the time scale is too long and they are worried about supply in the meantime. Thanks for your knowledge, I’ll look out for more on that as it develops. How long would it take to mothball a nuclear reactor and switch to this new energy source?

🙂 It’d take around 20 – 35 years to mothball conventional reactors, so it’s not a quick process, sadly. However, I don’t realistically expect fusion to be operating much before 2025 anyway.

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No, Duncan: JET – Joint European Torus. The fusion experimental system established in Cambridge in 1988.

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Interestingly, the first predictions about Nuclear Fusion were made by two people: a Welshman and a German/Austrian.

The Enigma machine is also very interesting, since the Enigma cryptology was first broken by the Polish, in 1939. They passed it on to the British SIS, so the real heroes were the Poles.

Ian, m’dear, last time I visited JET it was at Culham Laboratory (just a few miles south of “the other place”) and not Cambridge.

PS – I think “fusion – on our time!” devotees always regard commercial fusion power as being available in 50 years time, no matter when you ask. I think the 1st famous British fusion experiment was Zeta at Harwell (c.1957). Reputedly, that lead to the catch phrase that electricity from fusion would be “to cheap to meter”. Today we know better…

It’s amazing the way they move these labs around 🙂

Commercial fusion power is a way off – I agree. I suspect by 2025 one of the two major ‘hot’ projects will be able to generate electricity continuously, but assuming they can get the mechanics to function reliably the timescale for building new and much larger reactors would be something in the order of 30 – 60 years, I would imagine. However, new materials are appearing and we could still be surprised in the shorter term.

Back to the more mundane. I wonder if I’m missing something, as well as my brain? But here goes:
Just time to inject ten pence worth on my energy bills.
When I go into a shop to buy something, the salesperson doesn’t come to the cash out and say:
“Well now, that’s twenty pounds for shipping the product to the shop and ten more to get it on the shelf. The manufacturer charged us a hundred pounds and there’s our mark up of twenty pounds plus a of ten percent fee for delivery.”
There is a price tag on the product of £165 stuck on the shelf and I can melt my credit card in the knowledge that I am paying correctly for it and it is probably not cheaper down the road ‘cos I’ve looked.
I want to know that for every click of my energy meter I have to pay ten pence –or whatever. If another company makes each click eight pence I can get my gas and electric from them. I don’t give a damn about thermal conversions or calorific values or whether the gas is blue or green. The companies bids for gas and electric on the open market and if one gets it cheaper than the next they can undercut and demonstrate instantly that they are better value.
I can just about understand the need for pre-pay meters to cost more if they cover bad debts and need extra infrastructure, but I wish they didn’t because, as is usual in this unjust world of ours, if you are on hard times things are likely to cost more with less ability to seek the best value.
As for tariffs, they are amazingly opaque crammed full of caveats and clauses. Companies could either level out costs across the country so that everyone pays something towards those with more difficult environments for delivery, or they could make each meter click a little more to cover the cost and the customer has to accept this as part of where he lives.
So in my simplistic mind, I want one price I know I have to pay and an opportunity to go elsewhere if I see it’s cheaper. After all, the same electricity comes down the same wire and the same gas through the pipe, no matter who sends it there.

I like your kind of approach, Vynor. We certainly need to get things back to basics. By the time the wonder fuels of the future come along, fascinating though the technology might be, I shall probably not be a consumer.

I cannot see any justification for different supply or transmission prices for gas and electricity unless one lives in an extremely inaccessible location [and there aren’t many of those]. With gas you either have it or you can’t have it and generally they are not extending gas mains into rural areas unless they are close to one of the grid pipelines. Urban areas are generally connected to the gas grid because most towns, even small ones, that existed in the Victorian era had a gas works if they also had a railway. This is a small country and we have roads, railways, public services, and military, commercial and industrial installations in virtually all parts and they all require electricity to a greater or lesser extent, so the domestic demand is not necessarily the prime factor in the supply network. There was a time when proximity to a power station was an issue but following development of the national electricity grid that no longer applies. I don’t think there is a single power station left within the M25 but London can still put the kettle on and I doubt if the unit price of the transmission element has changed accordingly.

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There is an international gas market and prices will fluctuate according to demand and supply to which American trades are subject, but Russia needs foreign currency and, in view of its abundant gas supplies, is prepared to sell gas below market prices. Because of Russia’s history of manipulating supplies for political purposes other countries are reluctant to place much reliance on Russian gas other than for a small percentage of their requirements. In its turn, this also drives down the Russian price.

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If you say so, Duncan, but I would prefer to keep an open mind.

For the record, I did not say that Russia had manipulated “gas prices” but “gas supplies”; the difference might appear to be academic but, for countries that might wish to import more gas from Russia because of its lower price, supply reliability is just as important and worth paying for.

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Thanks for the tip, Duncan – if HC gets in I shall obviously have to buy some pharmaceutical shares. And if the news you bring us gets any worse I shall have to buy some anti-depressant pills. Unlike in the USA, our petrol is taxation with a little refined oil in it.

This is straying away from the topic, but I thought the EU’s sanctions against Russia in reaction to the occupation of the Crimea were entirely of its own volition and prompted to some extent because it regards Ukraine as a potential EU member. French farmers might be angry but the CAP has served them well for decades and they have a master’s degree in restrictive practices.

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Do you hope for a Trump victory then, Duncan?

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Ah – the ‘tablets’. Best cure for constipation, or so it says in the Bible. “Moses took two tablets, and it came to pass…”

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Hollywood teaches us that later Tribal Leaders usually had the Scrolls, but perhaps they had always walked that way.

Why is this becoming political again? Its about energy bills. We in the UK take little gas from Russia, and I would not like to see them in a position to turn off the pipeline until we have more friendly relations.

Maybe when we exit the EU we can have more freedom to take a pragmatic approach to our choice of suppliers. However I think there is nothing like increasing our self sufficiency, and fracking may well become an important factor to achieve that (as well as developing tidal energy).

@aneill, my emailed “The Weekly Scoop” from Which? says:
“£1.4bn
Amount the UK is overpaying on energy due to lack of compensation. Do you think more should be done?”

Compensation? Perhaps which? should correct this?

Can you please explain exactly how you calculate that “1.4bn” is being overpaid?

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duncan, if all these people move off standard variable tariffs onto fixed price fixed term tariffs, those tariffs will all increase in price to ensure profitability is maintained. So the savings quoted will not be achieved. That is the point I have suggested a number of times before. Standard variable tariffs subsidise the cheap tariffs.

We must be careful about the predicted savings, a bit like the EU £350 million a week. It is said that if all consumer came off Standard Variable Tariffs they would save £330 a year, totaling £1.4 billion. CMA estimate that the “sticky customers” who stay on SVT’s across the suppliers have lead to excess profits of £650 million. So if the total customer savings of £1.4billion are set against excess profits of £650 million it seems to me there is now a £750 million shortfall in revenue. How will that be redressed to give a “normal profit margin”? Well, prices for the fixed term tariffs will go up.

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I expect whoever wrote the little piece about energy bills in The Weekly Scoop had the word “compensation” in their head [because that is the word of the moment it seems when anything goes wrong] when what they meant to write was “competition”. Still a defective argument, as Malcolm states, but at least it would make some sense.

Duncan – I think the outcome of the CMA’s proposals would be that those on fixed priced tariffs would end up paying more for their actual energy but those on standard variable tariffs would pay slightly less and the competition would come through efficiency in administration [billing and customer service], procurement advantage, volume, and cost recovery. If the two types of tariff are allowed to co-exist the price differences between them would narrow. I would support abolition of the fixed price tariffs. Whatever happened, this supposed £1.4 billion ‘saving’ would not come off our household electricity bills collectively – it would be redistributed. It would marginally benefit those on lower incomes because they make up a higher percentage of the customers on the standard variable tariffs than on the fixed price ones.

Something I have not seen explored is whether companies that offer both types of tariff have to have identical terms for fringe elements like direct debit, dual-fuel, paperless billing, and exit penalties across their tariffs or whether they would be able to differentiate as they seek to increase their market share by having introductory offers that only last for a period before they progressively degrade to the default position [as seen in the telecoms market].

So far as I am aware, energy companies are not obliged to accept any customer who wishes to switch to them nor to accept any form of payment. In those postcodes that have an inferior payment history some companies might be unwilling to sign up new customers at all or [depending on credit checks] unless they agree to payment by direct debit or by pre-payment. Being selective would enable them to minimise their recovery costs which in turn would lower their overall price structure and make them more competitive where they are willing to supply. It is one way in which they could neutralise the cost advantages of the high volume suppliers.

It was clearly a mistake John, but I do wish Which? would be more careful. However it really was a lead in to ask @aneill how Which? explains the figures quoted. I hope we will be told.

Hello Malcolm, thank you for pointing this mistake out. I’ve flagged this with the newsletter writers and they apologise for this error, it’s a genuine mistake that should have been picked up.

Like Duncan explained, those who stick with the same energy supplier year-on-year are paying more than those who are switching to the tune of £1.4bn – this figure was found by the Competition and Markets Authority and reported on in its report published in July, the estimated figure is calculated for the years 2012-2015. The full report is available here https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/531204/overview-modernising-the-energy-market.pdf (PDF)

@ldeitz, Lauren thanks. I appreciate it was a mistake! Thanks for correcting it.

I have a copy of the CMA overview. Some extracts as follows: “domestic customers as a whole paid an average of £1.4bn a year more than they would have done under well-functioning
retail markets over the period 2012 to 2015,reaching £2bn in 2015. We estimate that suppliers made excess profits of around £650 million a year from 2012 to 2014, which would imply that a large proportion of the detriment is driven by inefficiency.”

Customers moving to cheaper fixed price tariffs can, and do, also of course move to one offered by their existing supplier where some of the “Big 6” offer competitive tariffs. The point I make is when people move to fixed price tariffs from the Standard Variable ones offered by many companies large or small, the total revenue these companies receive is significantly reduced and will have a substanial impact on profitability. To restore profitability to what they see as an acceptable level would mean, as far as I can see, a significant increase in the cost of those cheaper tariffs. So the £330 “saving” is not achievable en masse. I also find it confusing that a “saving” of £1.4bn is claimed when “excess profits” are said to be only £650 million.

The report also quotes other potential “savings” to be made:

“one study estimating savings from the introduction of time-of-use tariffs within domestic retail markets of between roughly £100 million and £350 million a year by 2025”

“Had it ( prepayment cap )applied in Q2 2015, the cap would have reduced prepayment customer detriment by about £300 million per year, equivalent to a reduction in average annual bills of around £75.”

The report seems to ignore the consequence of these current £100 million plus £300 million “savings”. Again, the loss of revenue will be compensated for by increased prices elsewhere in the energy bills. My simple mind just senses that this is not as rigorous an analysis as it might seem.

malcolm r, from your post, I noted the following line with interest:

“We estimate that suppliers made excess profits of around £650 million a year from 2012 to 2014, which would imply that a large proportion of the detriment is driven by inefficiency.”

In particular, I wonder if:

“we estimate that” means “we don’t know…”

and if

“a large proportion of the detriment is driven by inefficiency” means that there are too many suppliers in the market, thereby driving up standing charges through the needless duplication of marketing, advertising, sales and billing functions?

It would, of course, be both heretical and counter intuitive to suggest that the market ought to be more competitive if only a small number (e.g. six) lean and very efficient high volume suppliers were involved!

Looking at the reputation of the mobile phone companies gives me little confidence that fewer suppliers would do much to improve the energy industry. Introducing smaller companies (MVNOs) that use the large mobile networks does seem to have helped improve customer service and value for money.

My suggesting is much stronger government control of the energy companies. Taking your point about advertising, why are companies providing essential services that some struggle to afford allowed to waste our money on lavish advertising campaigns?

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Indeed it would, Derek. As businesses, as opposed to public services, survive by being competitive and maximising profits I find it doubtful that significant inefficiencies would be tolerated. Having myself worked for companies large and small, my experience was that they operated by using their resources as efficiently as possible, and ensuring staff worked effectively.

Duncan – The trouble is that even if you ignore advertising, as I try to do, you still have to pay for it. 🙁

Malcolm – The large energy companies don’t do very well in the customer satisfaction list produced by Which?

It is the government who have directly or indirectly “lavished money” on pointless childish cartoon smart meter advertising.
Which? advertises. Charities spend a good deal on trying to extract monthly money from us to support snow leopards, donkeys, etc – mrs r has logged these recently and is so far up to £900 a year.

I’m interested in minimising my expenditure. i have so far had little need to trouble the customer services of my suppliers, large or small but when I have they have been adequate. It is a secondary consideration to the financial saving for me.

I am pleased to say that so far I have not had to send any of their products back.

Most people are keen to minimise expenditure, but I don’t see why that should mean inferior service. My theory is that larger companies don’t feel the need to try too hard – one of the criticisms made of the old nationalised industries.

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Many people seem not keen to minimise their expenditure which is why they stay on higher tariffs than they need to.

I look to energy suppliers, large or small , to supply the energy I need. What customer services do I need?

Why can’t the problem of insufficient numbers of customers changing supplier due to confusing charging be fixed by the simple expedient of scrapping all standing charges?
If every supplier’s tariffs were expressed simply in terms of cost per Kwh ….. then comparisons would be delightfully simple and transparent.
£0.14 per KWh is obviously a cheaper tariff than £0.17 per KWh.
Confusion (even for those of us with a Maths degree) only really arises when variable standing charges are added into the price mix. In my view this has been a deliberate strategy adopted by the big energy suppliers in a (successful) attempt to bamboozle customers.
Comparing even just two tariffs ……. one at £0.14 per KWh with a standing charge of £0.31 per day …… with another at £0.16 per KWh and a daily standing charge of £0.26 is impossible for most mere mortals ….. even with the aid of a calculator.

A couple of years ago, Which? suggested simple unit pricing, like we have for petrol. They penalise low users, including those who are struggling to make ends meet.

Standing charges do not reflect fixed costs, otherwise there would be substantial differences between the standing charges for properties in built-up and rural areas. I suggest that the costs of providing and maintaining electricity cables and gas pipes are met from taxation and the smaller costs of billing and account management included in unit prices. Simple unit prices should help put an end to the confusion that the energy companies have fostered. I’m not sure that this could be achieved this winter, but we could make a start if the government cares about those who are struggling to pay their bills.

Oops. The second sentence should read: ‘Standing charges penalise low users, including those who are struggling to make ends meet.’

Wish – I agree that there is a problem caused by insufficient numbers of customers changing suppliers.

I do not agree that the cause of it can simply be put down to “confusing charging”.

I think the factors why many consumers can’t or won’t change supplier are much more varied and complex.

Also, as previously noted, most suppliers offer cheaper tariffs than their SVTs.

Many consumers on SVTs could save money by moving to fixed price deals offered by their existing suppliers – and yet, even given this simpler and, apparently, less risky option, they still won’t or cant move.

To make tariff comparisons, folk need to know what their annual energy consumption is. Then they can go to a comparison website and use that.

Or, if they have O-level maths or better, they might work like this:

Annual consumption: 5000 kWh

Cost on tariff A: 5000×0.14 + 365*0.31 = £ 813.15

Cost on tariff B: 5000×0.16 +365*0.26 = £ 894.90

or differential cost (B -A): 5000×0.02 +365x(-0.05) = £ 81.75, so B is more expensive.

But if they don’t know their annual consumption – perhaps because they’ve opted for paperless billing and never bother to download and read theirs bills – then they can’t compare the tariffs.

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more energy. They may be elderly, in all day, larger poorly insulated houses, even on electric-only supply. It would be unfair to add even more to their already-high bills. Standing charges do represent a certain amount of the fixed costs in your bill, and also add to the variety of tariffs available to suit different types of user.

As for complexity, that also derives from 40 suppliers all with different offerings. But if you haven’t tried it, make your choice simple and easy by using Which?Switch. Put in your postcode and expected annual usage and you’ll get a huge list of annual costs, starting with the lowest. All the work is done for you; just make your choice.

Somehow I think those people who of necessity have to use more energy also deserve to be treated fairly, particularly when their bills are much higher than those of the more fortunate low users.

The Which? Petrol Pump price proposal was originally put forward on the basis that most of use are quite incapable of doing sums. The real issue is the number of energy providers with different tariffs – often maybe cheaper for one fuel, but more expensive for another, so you still have some sums to do. However, I have more faith in our abilities. But you can avoid sums altogether by putting minimal information into Which?Switch; this will do the calculations for you for all energy suppliers, and give your likely annual bill starting with the cheapest. How easy can they make it?

Malcolm – did some words escape from the beginning of your comment above?

Thanks John:-) Sloppy copy and paste from the repeated comment on a parallel Convo. It should read:

Somehow I think those people who of necessity have to use more energy also deserve to be treated fairly, particularly when their bills are much higher than those of the more fortunate low users.

The Which? Petrol Pump price proposal was originally put forward on the basis that most of use are quite incapable of doing sums. The real issue is the number of energy providers with different tariffs – often maybe cheaper for one fuel, but more expensive for another, so you still have some sums to do. However, I have more faith in our abilities. But you can avoid sums altogether by putting minimal information into Which?Switch; this will do the calculations for you for all energy suppliers, and give your likely annual bill starting with the cheapest. How easy can they make it?