/ Home & Energy

Update: reforming the energy market


Ofgem has announced plans for reform in the energy market. What can energy companies do to make you take an interest in your tariff?

This morning Ofgem responded to the Competition and Markets Authority’s (CMA) investigation into the energy sector.

As many of you will know we’ve long campaigned for a fairer energy market, and the regulator is looking to implement the CMA’s recommendations as quickly as possible.

Well done Ofgem

It’s not often we get to praise regulators, but we will where we believe they have acted in the consumer interest.

It’s good to see Ofgem swiftly take forward the remedies set out in the CMA’s final report. The CMA’s investigation took two years to complete and it’s right that consumers start to feel the benefits of reforms as soon as possible.

The remedies that the CMA set out will not be easy to implement.

Making the remedies work for consumers

One of the biggest challenges Ofgem faces is how it will get consumers to engage in the energy market. We’re pleased to see that it will be testing a number of approaches. One of these is a consumer database listing anyone who has not switched energy supplier in three years. These people could then be contacted by other suppliers with their deals and tariffs.

We have concerns that this database could lead to an increase in nuisance marketing from energy companies, so we will working with Ofgem to make sure this doesn’t happen.

Ofgem has also announced a price cap on bills for customers on prepayment meters. The price cap will be introduced in April 2017 for more than four million customers helping them save £75 a year on their energy bill. It’s hoped that the price cap will protect some of the most vulnerable gas and electricity customers who are least likely to switch.

What will a fairer energy market look like?

In terms of the future regulatory model, Ofgem continues its move towards a principles-based approach to regulation. What this means is that the regulator will encourage companies to focus on performing for their customers, in terms of delivering services that customer want, rather than jumping through regulatory hoops.

One way we suggest they could do this would be to look at developing customer challenge groups (CCGs). CCGs are independent and challenge each company on how it’s engaging and listening to its customers, including reflecting their priorities.

Make a switch

Nine in 10 households are still customers of one of the ‘big six’ gas and electricity companies (British Gas, EDF, Eon, Npower, Scottish Power and SSE). And one in five customers in England have been with their supplier for more than 10 years. So if you think you’re paying too much for your energy or are fed up with poor customer service, don’t put up with it, make a switch.

Update: 7 February 2017

The energy regulator, Ofgem, has announced a temporary price cap for energy customers on prepayment meters.

The regulator’s announcement follows last summer’s conclusion of the Competition and Markets Authority’s energy market investigation, which found that some of the most vulnerable energy customers are those on prepayment meters.

Energy customers who are on prepayment meters often have fewer tariffs to choose from than those who pay by direct debit, cash or cheque, and these tariffs are usually more expensive too.

The cap levels vary for electricity and gas depending on where you live and the type of meter you have. But, the price cap is expected to be in place until 2020 and will be reviewed every six months.

Ofgem believes that this price cap will help around four million households to save an average of £80 per year. This price cap will come into force on 1 April.

Our Managing Director of Home and Legal Services, Alex Neill, said:

‘While prepayment meter customers are going to get their prices capped this year, millions of other vulnerable energy customers are likely to face inflation busting price hikes.

‘This is why energy companies need to do much more to engage their customers to switch to a better deal this winter. If suppliers fail to do this, the Government and regulator need to step in on behalf of energy customers.’

Will this price cap help you or your friends and family? Do you think more needs to be done in the energy market?


Why do Energy companies not charge per unit as measured on the meter rather than use ridiculous formulae to conceal easy comparison between suppliers.
I would make them show comparison of their unit rates on a like for like basis.
It couldn’t be to confuse customers ….could it ?

The energy you use – units of electricity, cubic metres of gas – form only around 45% of the cost shown on your bill. The rest are transmission and connection maintenance, government levies, admin and company costs. Not a formula but an assembly of different costs.

Great if you can get the HMG to increase fair sustainable Energy price competition, but even more important to get them to significantly & urgently address the glaring inequity caused by their refusal to build public housing & ensure that this & all new/existing buildings are to Enerphit/Passivhaus standards
e.g. https://www.theguardian.com/money/2016/oct/22/three-bed-house-500-energy-bills-how-you-can-slash-costs & as part of this similarly solve the lack of well paid jobs for those who are not graduates,
as well as graduates (currently also suffering crippling levels of government caused debt). Remember it’s all very well getting CAB Citizens Advice ref Energy Saving but this apparently includes yet more debt?! Meanwhile too, it seems Local Government’s HECA action is similarly hamstrung by HMG austerity?!

Pete says:
22 October 2016

All energy suppliers should be owned by the government not by overseas company and there should be
single price for single or duel fuel!

Would you really want to put so much power over your domestic expenditure in the hands of the government, Pete? Could you trust it not manipulate the prices for political purposes? At least if I don’t like the companies that supply my energy products I can switch and mix-&-match to my heart’s content. Your idea smacks of communism to me.

Most government departments are already sub contracting out to private companies who are benefiting from taxpayers money. Civil servants are turning up at their offices every day in the role as custodians, paying our money to others to carry out the work for them ……………..and they are being paid for the privilege!

Richard G says:
22 October 2016

To keep the price down, we need many private energy companies to compete, but they should be restricted to offering a single tariff to all. No more special discounts to big customers, paid for by higher charges to the little guys. No plethora of confusing deals. Let us have an open and honest competition for our custom.

Gordon Murray says:
22 October 2016

Fracking is an unacceptable practice. All fossil fuels need to be phased out rapidly. Nuclear (unless we move to Thorium based reactors and develop effective means of neutralising nuclear waste) has to be phased out rapidly, it’s far too dangerous. Energy should be derived from renewables. Scrap Trident and free up the 220 billion from that piece of madness to speed up our transition do renewables. 100% renewable infrastructure to be implemented by 2020. Decentralised grids. Oh ye cheaper energy prices, followed by free energy in the next decade.

Gordon – I cannot see how on earth you are going to replace all the non-renewable energy capacity between now and 2020. That’s something like 90% of our energy supply, or worse because demand is growing faster than capacity. So that’s no gas, anywhere, for anything – power stations, home heating, heating for schools, hospitals, shops, offices, and so on. And for electricity – no oil, or gas, or coal combustion, and no nuclear power. So we are left with some hydro-electric power, wind power and solar power plus, in the distant future, some wave and tidal power. Wind power is a useful augmenter of our energy requirements but is neither available nor programmable to suit demand. Solar power is even less efficient and reliable but we could have a rule that says that all air-conditioning plant must only be run on solar energy. Commerce and industry seems to be reluctant to harness solar energy so the major contribution is coming from households and a few solar panel arrays. Probably fewer than half the homes in the UK are suitable for solar energy production due to location or orientation or both, and nobody who lives in a flat or a listed building can participate, and since the lights and heating come on when the sun goes down there is an obvious mismatch between demand and availability.

Anyway, I don’t want to dampen your enthusiasm for renewable energy so I look forward to reading how you think this could be achieved – and you can extend the timeframe if you like because I think even you would agree that 2020 is likely to be a bit tight from a standing start.

The “green” energy lobby has had far too much influence on our governments & has proved to be totally ineffective . It costs every single person in the Uk over £160 a year each to produce & that is not acceptable.
Nuclear energy plants should have been built years ago, but unfortunately the government at the time dithered & listened to all the doom mongers. We are now not capable of building our own nuclear power stations & to even consider help from China is sheer folly.
Fracking would give us at least 50 years of self producing gas & should go ahead immediately & this government must not repeat the mistakes made about nuclear energy, otherwise we are & will be dependent on Russia for our gas for years to come – which may actually be short if the Russians get fed up of our silly sabre rattling & economic threats.

Why by now every house has NOT had solar power roof collectors on baffles me? For what this GOV is paying the Chinese to ( Not? ) build nuclear .( Why China?) I think just about every house could be fitted with solar power:
for the same price? Safer, cheaper ( In the long run) . But I suppose Less Divi for them that can afford shares ?
SO, we , especially us O.A.P’s ! Keep getting ‘ Ripped’ Off !!!

Brian – You posted your thoughts at 21:36. I presume you had the lights on while you were doing so, or was the sun shining where you are? Where do you think the power that we all need will come from when there is no sunshine – we have very little effective and economical energy storage capacity that doesn’t involve a fossil fuel. By all means let householders install solar panels and feed any surplus power into the electricity grid, but let’s not kid ourselves that that will keep the shops going, and the factories and offices working, or keep the street lights on, or keep the electric trains running.

For the record, EDF is building and will be running the Hinkley Point C nuclear power station; China General Nuclear Power Group [CGN] and China National Nuclear Corporation [CNNC] will be part-financing the project alongside EDF. The government will not be paying the Chinese to build any nuclear power stations. The construction costs will be amortised into the unit prices for electricity delivered into the grid for which the UK government has, on our behalf, kindly allowed EDF to charge an attractive premium.

What a travesty the solar pv scheme is. That’s not to say that other energy schemes are being managed any better, but I’m mightily relieved that such appallingly inefficient use of resources in this scheme isn’t more widespread. From a green perspective, no politician or householder can hold their head high with this scheme, but it does appeal to financially well off individuals who know that 48p/unit is not affordable electricity generation. Solar farms would be far better, either in the UK for energy security, or perhaps Africa, where nations would welcome some economic stimulus, and we could feel better when it comes to thinking about the best return on the energy invested in making solar panels.
On the subject of other terrible schemes, we have just had a smart meter fitted. We learned too late that you can just say No, and you may want to. In our small, modern, house, the signal barely reaches the kitchen, and it cannot pick up the gas meter signals even held up by the meter cupboard door. If your gas boiler isn’t on a service contract, you may want to consider that the meter installers state it is your problem if the boiler doesn’t relight after the new meter is fitted. After less than a week, the meter is now ignored. An incredibly wasteful investment that the Germans managed to make an easy economic case for not doing themselves. I hope it turns out to be better than the folly it appears to be at present.

One of the disappointments of moving home was inheriting a smart meter because I was going to refuse, in principle. Perhaps the government might have had the courtesy to ask if consumers were happy to pay the vast cost of the roll out of these meters. I had no objection to people paying for them and maybe getting a small discount for the savings made by their energy supplier(s). I would not mind them going to those who are struggling to pay their bills, but I still question the wisdom of imposing them on us all unless we refuse.

My view on the feed-in tariff is that the payment should be the same as it costs to buy electricity. I would not object to modest grants for solar installations.

I wonder what other schemes the government will lend their support to.

I suspect that the government of the day, having jumped on the post-Rio bandwagon, wanted to show its progressive outlook and commitment by setting up an entire government department devoted to energy and climate change. The first thing it had to do, of course, was to work out where it could best interfere in order to show itself off in the most favourable light. So any passing hare-brained or crackpot scheme was seized upon to demonstrate that the government really cared about the future of the planet. Hence the wasteful, and ridiculously expensive, smart meter policy, plus the even more environmentally-damaging manufacture of [mainly imported] solar panels and the grossly profligate enrichment of a well-off element of the population with large south-facing roofs. I would add light bulbs to the list, but that was an EU initiative – although it was zealously implemented in the UK by the DECC as soon as the ink was dry on the directive. More by the enterprise of manufacturers developing better LED’s, rather than through any government determination, we have, at last, arrived at the right place with light bulbs, but at a considerable economic and environmental cost in the meantime.

I agree, John. I do hope that history records how badly these issues have been handled.

The introduction of low energy lighting was handled appallingly. It would have been better to have provided encouragement rather than banning the inefficient lamps, so that consumers would want to change. Some even stockpiled the old bulbs.

I am still to be convinced that climate change is due to human activity to the extent that has been claimed and I am more concerned about the rate of use of fossil fuels and pollution of the environment. Negative population growth could solve a lot of problems, in time, but how do we sell that to the general public?

“I am still to be convinced that climate change is due to human activity to the extent that has been claimed ” – me too! Having said that, I favour a precautionary approach, in case we are either causing or accelerating its effects.

Even before global warming was a big issue, I was well aware of the more general adverse affects of profligate energy use on our environment. Hence, I have always favoured the efficient use of energy.


Make erroneous transfers a criminal offence.

Mike Parker says:
23 October 2016

There is overwhelming scientific and practical, on the ground, evidence that Co2 emissions are contributing to global warming. It is logical, as scientists advise, to cease prospecting for new fossil fuels to burn. Which? would be best to campaign for the the building of as many near carbon neutral houses as possible ( great for the new owners long term running costs), and the systematic upgrading of all old houses heat loss prevention.
Nuclear is too expensive, will take too long to arrive, is extremely expensive for running costs, compounded by often hidden and removed from the equation, security and virtually infinite waste disposal costs. There are already areas in existence that show a balanced mixture of renewable, plus reduced consumption, can comfortably provide for all society’s energy needs. It helps also to avoid believing what you can read in certain tabloid newspapers.

I am mystified that the government is applying a carbon tax to my green electricity energy that is 100% supplied by a verified renewable energy supplier.
‘OK the gas I receive is at the moment only 5% green but that could become a lot more green very quickly if our government were more interested in increasing reduction of greenhouse gas emissions through waste. Using the huge amount of organic waste that we generate to create useful gas instead of accessing even more ancient buried gas via enablement for fracking is the sensible option. Solving 2 problems without creating another and building a sustainable future not least by leading the way to support technologies and industries that provide sustainable jobs. Government has a duty to provide for OUR long term interest not just their own short term political party survival. That is the real problem undermining all these issues.

As long as we are not burning organic waste that is compostable, I do agree that we should be moving towards green energy. Rather than relying on individuals to move to green energy, perhaps the answer is to make it a requirement to move in that direction. Diesel fuel now contains biodiesel and petrol contains ethanol, which is a renewable energy source.

Dave James says:
24 October 2016

I think now is the time to take our energy companies back and run by British companies instead of being handcuffed by foreign companies

No one has to buy their energy from a foreign-owned supplier. There are several UK-owned companies – British Gas and The Co-operative Energy to name but two. In the twenty-first century the British people seem to like to have a choice.

Steve Bolter says:
25 October 2016

This is not what I meant when I said energy is a priority. This is just tinkering at the margins.
I meant decarbonising the economy .
Improving thermal insulation in buildings and making equipment more energy efficient.
Making better use of direct solar for light and heat, including solar panels for hot water.
Increasing the amount of very low carbon electricity by investment in renewables, from rooftop solar to offshore wind, and in nuclear ( Not just Hinkley, but other potentially better designs too ) Using low carbon electricity to generate hydrogen for use as a vehicle fuel and to run heat pumps.
To replace diesel (and the petrol) in vehicles with batteries or hydrogen tanks.
Lack of such investment would not only make the price of oil and gas escalate, it would also fire global climate change which will wreck the economy and living standards.
What is the point of worrying about getting a few pounds of this months energy bill and neglecting to take steps to prevent energy and other costs escalating over the next decade.

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From what I know and what I’ve seen, the promise of cars using water as a fuel is usually the domain of crackpot inventors and/or snake oil salesmen.

In short, chemistry and combustion science teach us that water is a combustion product – not a fuel.

Obviously you can use another primary energy source to break water down into hydrogen and oxygen and then use the separated hydrogen as a fuel. Nonetheless the idea of running a car on water makes no technical sense; it is about as sensible as the claims that were made for cold fusion a few years ago.

Indeed. It’s the question schoolboys always ask: “If water is Hydrogen and Oxygen, why can’t you use it to run engines?” but water is, as you say, actually a sort of fire ‘ash’, which needs a lot of energy input to separate the component chemicals. So small fusion generator in the boot might enable it to run off water, but nothing else would.

It’s simple to use electrolysis to produce hydrogen and oxygen, preferably using electricity from solar power rather than fossil fuels. The problem has always been safe storage of hydrogen. When I was a student there was much talk about use of palladium, which is effective at adsorbing hydrogen. Unfortunately, palladium is rather too expensive for use in vehicles.

Just part of a Wikipedia article on the matter

A fuel cell forklift (also called a fuel cell lift truck) is a fuel cell-powered industrial forklift truck used to lift and transport materials. In 2013 there were over 4,000 fuel cell forklifts used in material handling in the US,[125] of which only 500 received funding from DOE (2012).[126][127] The global market is 1 million fork lifts per year.[128] Fuel cell fleets are operated by various companies, including Sysco Foods, FedEx Freight, GENCO (at Wegmans, Coca-Cola, Kimberly Clark, and Whole Foods), and H-E-B Grocers.[129] Europe demonstrated 30 fuel cell forklifts with Hylift and extended it with HyLIFT-EUROPE to 200 units,[130] with other projects in France [131][132] and Austria.[133] Pike Research stated in 2011 that fuel cell-powered forklifts will be the largest driver of hydrogen fuel demand by 2020.[134]
Most companies in Europe and the US do not use petroleum-powered forklifts, as these vehicles work indoors where emissions must be controlled and instead use electric forklifts.[128][135] Fuel cell-powered forklifts can provide benefits over battery-powered forklifts as they can work for a full 8-hour shift on a single tank of hydrogen and can be refueled in 3 minutes. Fuel cell-powered forklifts can be used in refrigerated warehouses, as their performance is not degraded by lower temperatures. The FC units are often designed as drop-in replacements.[136][137]


“So small fusion generator in the boot might enable it to run off water, but nothing else would.”

Personally I’d fancy one than could run off discarded househould items like food waste 😉

That was the idea used in Aardman’s Arthur Christmas animation, where the S1 futuristic ‘sleigh’ derived its fuel from milk and cookies.

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I recall seeing pictures of vehicles with large gas tanks on the roof but I don’t know what gas was used. I think one episode of Dad’s Army featured something like that on top of their van. I can also remember pictures of a vehicle towing a trailer with some sort of plant mounted on it generating producer gas.

Where there are public tramways it surprises me that nobody has fitted up a van or lorry to collect the current in order to drive an electric motor to power the vehicle for a section of its route. I suppose getting held up by the tram in front while it sets down and picks up passengers is a drawback, but it could be useful for early morning deliveries to shops and businesses in city centres being both silent and non-polluting.

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A big bag of town gas on the roof of your car might have been a slight H&S hazard when you chucked your fag-end out of the window during a blackout. Bit like the Hindenburg. Was there any Health and Safety during the WW2 – seems a bit pointless.

I can’t believe such things were ever more than an experiment; some worked, others didn’t and were quietly withdrawn. The only specific health and safety provisions during the Second World War were probably the air raid warnings, the issue of a free gas mask, and a cheap stirrup pump for putting out incendiary bombs. And the prophetic messages from Herr Hitler and Dr Goebbels, of course.

Nowadays, manufacturers of small petrol generators offer conversion kits to allow them to run on gas (LPG) and there are several benefits of doing this. Of course they don’t have to go under low bridges.

The more you think about gas bags on vehicles the more stupid the whole idea seems. I would have thought basic stability was an immediate problem. To make the whole outfit safe would probably have increased the weight of the vehicle, therefore the power required to propel it, so a bigger gas bag would have been required, and a longer wheelbase [or a trailer] to keep it within the kinetic envelope for a moving vehicle and below bridge heights, and so on ad infinitum. Wind resistance would be an additional problem and when the bag was nearly empty it would be flapping about on the roof like a sail!

There are some gas powered single-deck buses in Norwich but the gas is stored in tanks enclosed by a fairing on the roof, the wheelbase being long enough to enable a sufficient supply to be carried for the day’s operations.

I have now gone so far off-topic I can’t find a way of getting back to domestic energy.

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duncan, I was referring to H&S not the gas bag. In a tongue-in-cheek way.

Yes we should get back to the topic but some of the diversions certainly add colour to the discussion. My Convo Nav says that we can rejoin the main road soon.


I’m not sure what youtube video you are referring to – so I cannot watch it.

“Now if I said I was building a fusion generator how long would it be for me to get a “visit ” -banging on door at 2 am -heavies outside , unmarked van, dragged out , drugged , taken to “parts unknown ” , or is it legal ?”

I’m sure fusion research and development is legal. If, however, your fusion project required – or would produce – radioactive substances (in higher than exempted quantities) you would need to comply with appropriate health and safety rules/legislation.

Most design concepts for large scale fusion power reactors use the deuterium/tritium fusion reaction. This releases energy and neutron radiation. Lithium is then fed in the reactors radiation shielding, where it can capture neutrons; this produces more tritium (radioactive hydrogen) and alpha radiation (which is much easier to contain than neutron radiation). Deuterium can, of course, be obtained from the distillation of water, e.g. by hydro plants as featured in “the heroes of Telemark” ww2 drama.

Incidently, those familiar with the real history of those events, may recall the episode in which the Norwegian commandos commander a wood-gas powered car in order to reach the local ferry, which they then sabotage.

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Yes, hydrogen has been an effective motor fuel for many years. Just tricky to decant and store 🙂 But it’s the whole “making cars run on water” thing that the snake oil folk have been doing for decades. Surprisingly, it still crops up and takes even educated people in.

There are thousands of sites and hundreds of YouTube videos purporting to show how it works, and some of these sites talk about the ‘Illuminati’ and how inventors of these technologies are murdered if they don’t accept huge sums of money to stop production. What I always find rather amusing is how those who go on about conspiracies and state agencies fail to spot the logical fallacies inherent in what they’re saying. If there are hugely expressive governmental agencies following every move and every communication made then how is it possible that there are, quite literally, billions of words about these ‘secret’ organisations freely available and claiming all this?

I was watching a James Bond documentary a few years ago and I’m sure he was trying to recover a revolutionary energy device from some criminal gang who had stolen it. It was lost again. But surely someone must know how it was made?

Ian – The best Snake Oil is only available on the internet now and there is an infinite supply it would seem. It is no longer hawked or peddled door-to-door, but it is sometimes promoted in publications, home exhibitions and car shows, and is commonly seen at open air markets and car boot sales. It is no longer the exclusive province of salesmen and many women are now involved in pushing such concepts [alongside fancy goods and novelties in most cases], even using on-line auction sites for customer reassurance. I hope this helps.

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Let’s just hope there aren’t any books on the subject then… 😉

Linda Brown says:
26 October 2016

Smart metres are they reliable has anyone had problems cos we have

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Our smart meter display mostly just reports the electricity. It once showed a gas display, but that was 5 minutes in two weeks. We were told we would be getting a new display unit soon, because the current ones they supply aren’t any good. No further news, and no messages offering promotional low price energy either. If we had read up more before, we wouldn’t have had it fitted. The display will shortly be unplugged to save electricity, and forgotten about.

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Energy is far too highly priced
Years ago the lie was put out that Nuclear Power would be dirt cheap
what a lot of crap that was In 2016 folk ought to be getting power almost free if all the stuff about Fuel Efficiency are true
I am very angry at the Huge Corporations who DO NOT offer the LOWEST TARIFFS they ought to be heavily fined by Ofgem for that yet it does not take a genius to see that Privateers run 100% of UK Power
Time for Fair Play in Energy .

Trevor, the last time I looked a number of the “big 6” offered very competitive fixed price fixed term tariffs. The new small entrants also can (some of them) offer competitive prices because they buy energy at current prices, while wholesale prices are low. The bigger companies buy several years forward to even out sudden changes. When wholesale prices rise the small companies, who can’t easily buy forward, are likely to become uncompetitive. Cash in while you can.

Malcolm that doesn’t guarantee the consumer receiving the benefit of any advanced wholesale price purchases.

Shareholders, not consumers are more likely to be the overall winners in any extra profits made by private companies. Smaller companies, on the other hand, may offer a superior and more efficient service as well as competitive prices, which counts for a lot when you consider some of the energy pricing problems experienced with the ‘Big 6’ by contributors to Which?Convo.

The introduction of smaller companies, generated more competition in the energy market and prompted the ‘Big Six’ to reconsider their monopolistic pricing strategies with more people switching to alternate suppliers offering better service and deals.

The U.K government should now be focusing on updating and improving the country’s antiquated rail system with a view to reducing the congestion and emissions on the roads. Building more motorways will just encourage more vehicles to use them creating more toxic pollution. Any available money should now be invested in creating a more efficient and affordable rail system so that people will be encouraged to use their cars less, which would in turn, also help to reduce the ever increasing obesity and diabetes problem by cutting down on NHS expenditure.

Totally agree about the railways, Beryl.

Forward buying helps to even out the ups and downs in prices. Many people want relative stability which is, I suppose, why fixed term fixed price deals have become popular. Personally I would do away with them as they are subsidised by those who don’t move off variable tariffs.

Railways should certainly be improved for freight. For passenger journeys you still need transport each end to get you to a from your final destination, and many, particularly families, find it cheaper to travel in a car than to buy multiple tickets. Less “routine” travelling has to come at some point by reducing the need to commute.

Malcolm what is required in the world is long term affordable energy not just Cash in while you can that is no answer to the huge rip off prices rising all the time
Energy ought to be run by the State and FAIRLY PRICED
There is no room for PRIVATE GREED re Energy costs

“Energy is far too highly priced”

I really don’t agree.

Personally, my energy costs are quite small relative to the amount I spend on food.

If the government’s levies and obligations are stripped out of the energy bills I believe it is the case that energy prices are lower in real terms than they were before privatisation. Given that many homes now have superior insulation and energy-saving measures installed consumers’ energy costs are even lower in real terms. That’s not to say that further waste and inefficiencies should not continue to be eliminated but profits are not particularly high at around the 3-4% mark; the numbers are big because turnover is so high for the Big Six.

Malcolm what the UK actually requires is long term Low sustainable energy for many reasons
1 Lots of folk are on Fixed Income ie Pensioners who cannot afford hikes in prices at no notice
2 Many are unemployed therefore cant afford Heating when it is required
3 Energy is Not just for Profiteering it is a necessity for all
4 If Nuclear is sooooo great why is it sooooo dear
5 UK energy ought to be nationalised to determine fair prices
6 Folk in poverty must choose to Heat or Eat grossly unfair
7 UK must learn a lesson in compassion life is NOT about making profit only
8 Energy is part of good health and must be afforded by all in the country
9 Many in energy positions are getting far too huge wages that others pay for
10 Time for fairness in all utility pricing
in the 5th wealthiest land in the world

Derek for you it might be great for many others it is not take a look at Fuel Poverty In The UK online toget some of the facts gathered in from all over the UK it is not at all funny that many toil to heat their houses while the Fatcats lap up ever growing profit and those “Shareholders” creaming of OPM are among the lowest in the UK

Trevor – I am well aware of the term fuel poverty and of the problems faced by many in affording their living costs in the UK. I’m no stranger to “lending” money so folk I know can have leccy and gas.

But I see the problem as a social and political one, in which the term “fuel poverty” is used by those in power to distract well meaning but ill-informed do-gooders away from the root causes of these issues.

By setting up the “greedy energy companies and their fat cat bosses” as the villains in this fairy tale version of reality, I think we distract attention from the politicians and civil servants who set the levels of state welfare and pension benefits and the selfish, self-centered electorate, who are in favour of welfare services, but only so long as they don’t actually have to pay the level of taxes required to fund improved benefits.

We have often debated energy company profits on these pages. So far as I can recall, no-one has managed to produce any evidence that there are growing and excessive levels of profit in the UK domestic energy sector.

Derek – These are fair comments but what concerns me is that people who are not coping for one reason or other are being allowed to remain on expensive tariffs. In our ageing population there are many in the early stages of mental decline but still capable of independent living. I doubt many of them periodically log into Which? Switch, even if it could save them money. Many can afford to pay over the odds. I don’t think that’s right but obviously those who are struggling are the priority. They are not necessarily in the ‘vulnerable’ class, though could join it. I want our society run with the needs of citizens in mind, not just companies and shareholders. I agree with your point about the level of taxes and it’s clear to me that we need some redistribution of wealth in this country.

Would you support scrapping fixed price fixed term tariffs that seem to be subsidised, and thus enabling standard variable tariffs to be reduced in price and to become the norm for all? I would like Which? to look at this and if the facts support it, lobby accordingly. I do not see why an individual supplier should offer one tariff 25% less than their svt for the same products.

malcolm, I think we need to be careful about identifying our objectives here.

I think most of us are in favour of fairer systems, in which folk pay fair prices for their energy.

For example, if I can be bothered to shop around, it is fair that I should end up paying less than

(a) someone who is “stupidly wealthy” and has so much money that they just cannot be bothered to shop around?


(b) someone who, though no fault of their own, is struggling to pay their bills and who lacks the ability, either on their own or with help from any friends and family that they may have, to shop around and thus save precious money?

For (a) I’d say definitely yes but for (b) maybe not so much.

If – as I suspect – the cheaper short term fixed price tariffs are loss-leaders, what we really want to do is restrict the market so that only profitable tariffs are allowed, so that the profits are gathered reasonably uniformly from all customers.

This might be attempted by only allowing each retailer to offer a single SVT to all their customers. However, it remains to be seen how competitive the market would be if run on that basis.

Many of us will opt for choosing a fixed price contract in case prices go up. The problem is that the standard variable tariffs are typically substantially more expensive, and that’s where customers land up if they fail to take action.

I would prefer both options to offer the same or very similar prices and those who opt for a contract will either win or lose depending on whether prices go up or down during the contract.

That does not prevent companies competing with each other over prices.

Derek’s group (b) are the ones that concern me.

DerekP, exactly. We have 40 energy suppliers who have different cost bases, buy their energy in different ways from different sources, so there will still be price competition. I have, through my MP, written to BEIS asking again about the apparent subsidy given by energy suppliers to their fixed price tariffs. So far BEIS have denied this is happening, but I think figures presented show that this is untrue; the difference in price cannot be accounted for by administrative savings, as is claimed. Whether I get a proper answer remains to be seen. I’ll maybe then copy the information to Which? and perhaps they will either point out the flaws in the argument, or consider adding it to the fairer prices campaign.

I agree that we could fix our prices for more certainty of our likely spend (which also depends upon cold weather for example). But are we in a better place to judge how prices might change in the future, or is our energy supplier? So all things being equal my guess is if the deal stood on its own feet we would likely lose – a bit like online gambling.

If fixed term tariffs were costed on the same basis as svts – making the same profit margin but reflecting genuine saving in administration (as the Government claim according to BEIS) then I would support having the option to fix my price. But, as you say, the svt and fixed tariffs should, in practice, be much closer – not differ by up to 25%.

I agree, but guess that the companies are more than happy for customers to be moved onto SVTs because it is a ‘nice little earner’. There are various solutions that could make prices fairer but I wonder how much longer we will have to wait for one to be implemented.

Exactly the situation as I see it. I would like to see a formal examination of the justification for the often substantially lower prices offered for fixed price tariffs so we know whether an “attack” is valid. This is something Which? could do.

I have posted these examples before for an Ofgem average domestic user:
SSE – fixed price £873, SVT £1122 – saving £249 / 22%
nPower – £874 / £1171 – saving £297 / 25%
Scottish Power – £922 / £1145 – saving £223 / 19%
E.ON – £1021 / £1135 – saving £114 / 10%
EDF – £1037 / £1170 – saving £133 / 11%

As total admin costs are, on average, around 15%, can any of the above savings be justified on that basis? Or on any basis?

Not on any basis, Malcolm. I believe that in essential and universal markets like energy even ‘loss-leaders’ should have a moral and ethical basis and that they must be accompanied by a demonstration that they are making a contribution to profits.

The real test is to ask an energy company whether, if everyone of their customers on a standard variable tariff switched to a fixed-price fixed-term contract, they would still be making a profit. If the answer is NO then chicanery is in action.

There is published information that the major energy companies’ profits are around £800m a year. There is also a claim that consumers are overcharged by £1.4 billion. This does not add up. I suspect, and have said before, the “overcharge” is calculated on the basis of those on svts when they could be on a fixed price. But, as you say, if all migrated to fixed price contracts and “saved” £1.4 billion, that would wipe out profits and produce a £600m loss. That will not happen of course.

In practice, the more people who move to fixed price contracts, the higher must be their price to maintain profits at an acceptable level. The savings claimed rapidly reduce, or evaporate totally So yes, I think these figures are misleading. They give a false impression of what consumers could achieve.

There’s plenty of evidence that demonstrates the ‘Big 6’s’ reluctance to pass on energy price reductions in the past. See: the guardian.com – Big Six Companies Slammed For Not Psssing on Price Cuts.
The introduction of the smaller energy companies has generated more competition in the market.

People using trains instead of cars will almost certainly enjoy a more healthy lifestyle by walking to and from train stations where possible, helping to reduce obesity, diabetes and cardiovascular disease, decreasing the burden on our already stretched NHS. 30 mins a day is recommended by most health practitioners.

Apologies for typo! ……….Not Passing on Price Cuts sounds better.
I am surprised the moderator didn’t pick up on this occasion 🙂

I have also lost the ‘edit’ facility as well as my original avatar and my password is blocked. Woe is me 🙁

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More likely Beryl’s log on didn’t work properly. Happened to me today.

I did wonder about the spelling Beryl! Out of interest I’ve just changed two family houses to new energy suppliers who were almost the cheapest (the cheapest were two new little known companies). Both were among the “big 6”.

A lot of people don’t live near a railway station so trains need a blend of transport types. But why do we need to travel so much? My concern is that commuting by road or rail either causes excessive pollution or requires huge resources for only two parts of the day.

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I am not aware of any blockers on my browser Duncan. I lost a connection when clicking the ‘send’ indicator and an “Oooooops” message appeared telling me there had been an error. I repeated the same message again but now have to go through the rigmarole of signing in each time I post a comment.

Hi Beryl, this all seems very strange – from what I can see you don’t appear to be logged in at all :-s

I recall that this happened before, earlier this year. Beryl, did you fix it by unblocking the cookies for Which? Convo. Maybe you could try updating the browser you use or clearing the cache. I’ll pick up with our developer if this still doesn’t work for you – sorry!

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It does seem rather odd my original avatar appears in the ‘recent activity’ section but then transmutes itself into a different one in the ‘topic’ section. You are right Lauren, I do recall the same thing happening once before when all cookies were turned off but I have just checked and they are all well and truly switched on. The mystery deepens 🙂

One little issue in here is that you might appear to be logged in but in fact you’re not. If you try to log out, then log in again all might be well.

Today the energy regulator, Ofgem, announced a price cap for prepayment meter energy customers. This comes following the CMA’s two year long investigation into the energy market, which found that prepayment meter customers were some of the most vulnerable energy customers. The price cap will come into force on 1 April.

Commenting on this, our Managing Director of Home and Legal Services, Alex Neill, said:

“While prepayment meter customers are going to get their prices capped this year, millions of other vulnerable energy customers are likely to face inflation busting price hikes.

“This is why energy companies need to do much more to engage their customers to switch to a better deal this winter. If suppliers fail to do this, the Government and regulator need to step in on behalf of energy customers.”

@ldeitz, The large majority of customers seem to be not bothered, according to research, about changing suppliers even knowing it is easy and can make significant savings. Those who need help are the people who are unable to do this for themselves.

I would scrap those fixed price fixed term energy deals that are subsidised by those on standard variable tariffs. SVTs should then reduce significantly in cost and one reason for switching would go. Would Which? support this?

You cannot expect a commercial company to recommend a customer changes to a competitor, can you. This would need to be publicised by an independent party such as Ofgem. But you cannot force customers to switch.

How could Which? help people engage with their energy costs? Perhaps replace some of their current adverts with a worthwhile one to highlight the benefits of switching and the Which?Switch service.

We need, I believe, to focus our energies on finding ways to help those unable to help themselves. Ofgem currently have a document out for consultation with this issue included. Are Which? taking part in this consultation and making workable proposals?

The reason that energy pricing is a mess is because companies are allowed to keep customers paying higher prices unless they take regular action to check prices and switch tariff or supplier when necessary.

Efforts to encourage more people to switch will cost money, and I do not condone use of public money to provide a partial solution when the better approach is to stop the companies from exploiting their customers. I would like to see Which? using its resources to tackle the problem and push for proper regulation in the energy industry rather than helping us play catch-up – which is hardly likely to help those in greatest need.

“energy pricing is a mess”. Not in my experience. The majority of people, according to research, who don’t move suppliers are well aware of the savings and what to do but don’t feel the need. I want our efforts devoted to helping those who are genuinely unable to select the right tariff.

With the present tariffs you only need to check once a year to see if a better fixed-price tariff appeals to you. I have done that for several years; it takes very little time or effort and using Which?Switch you can easily see the whole range of annual charges to select from.

Would you support removing subsidised tariffs and making a standard variable tariff the norm?

Maybe not in your experience but Ofgem and Which? are rightly unhappy, I don’t want to spend public money dealing with a problem that has been created by the energy industry.

I’m on a fixed tariff and before this it was one arranged through a collective switching scheme. For the time being I can cope with jumping through whatever hoops are necessary but I want us to think about those less fortunate than ourselves.

I am not sure what you mean by “a problem that has been created by the energy industry”. They offer a range of tariffs that we can choose from. Ofgem oversee this industry and consult regularly on changes – such as tariff range, pre-pay meters, dealing with vulnerable customers. So any “problem will be created by a range of interested and influential parties, including consumer groups. Does Which? engage in such groups?

“think about those less fortunate than ourselves” is something I have regularly emphasised. We should concentrate on helping those unable to get an appropriate tariff. However, energy companies will not have, and should not be given, the sensitive information about customers they would need to target those genuinely needing help. That is the job of the state.

When we criticise energy companies for our energy bills, we must remember also to criticise government. They currently add £64 to them to support low carbon generation. At today’s prices that will rise to around £129 by 2020. The Public Accounts Committee have criticised them for inaccurate forecasting and controls. When we see that we might be giving a £1 bn a year to Drax to burn wood pellets, it is understandable.

The PAC are concerned about value for money. I wonder how the proposed Swansea lagoon would meet current criteria? I seem to remember a payback period being over 100 years. However it would provide totally emissions-free energy from tidal change. Sometimes we have to look at the best bigger picture and stop burning stuff?

It’s necessary to take into account the environmental impact assessment of proposed schemes as well as economics. I have not read this, but it was easy to find: http://democracy.swansea.gov.uk/documents/s14927/APPENDIX%20C%20-%20LIR.pdf?LLL=1

I live within a mile of a site that had been investigated for its potential use for fracking. Having looked into the concerns I would be happier that we look at balanced use of different forms of renewable energy so that we can indeed reduce or dependence on fossil fuels. I think we were wrong to focus heavily on wind power. What most of us can do is to cut down unnecessary use of energy.

Maybe the government deserves criticism for its predictions and actions in recent years but doing nothing is not an option.

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We should criticise government when they do things badly, which was the PACs stance. I’d include £11bn (and rising no doubt) to fund smart meters. We will not cut down on electricity if we promote electric vehicles.

I like your diplomatic approach duncan. I took these figures from the government select committee.
Framework was £64 of household’s annual energy bill

The Framework sets yearly caps on the forecast costs of three government schemes to support low-carbon generation that are funded by consumers: the Renewables Obligation, Feed in Tariffs, and Contracts for Difference.

The Framework requires the Department to take early action to reduce costs if forecasts exceed the cap. The cap is £4.9 billion for 2016–17 rising to £7.6 billion for 2020–21. In 2016 Framework costs constituted £64 of the typical household’s yearly energy bill.”

I don’t recall the comments on Scottish green energy.