A British Gas van. (Credit: Flickr @ brianac37 https://www.flickr.com/photos/brianac37/)According to the UK’s Department of Energy and Climate Change (DECC), more than two million customers have switched to independent energy suppliers since 2010.
Independent energy suppliers were given a further boost as the UK government and Ofgem—the government regulator for the electricity and downstream natural gas markets—published a list of commitments that address some of the key concerns to make it easier for them to enter and grow in the energy market.
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The UK government appointed a senior civil servant responsible for managing relations with the independent energy suppliers, giving them the opportunity to discuss concerns and shape policy development at an early stage with aim of increasing competition.
Households could save up to £200 ($335) a year by switching supplier and the UK government encourages all consumers to shop around for the best deal for their energy bills.
The UK government is making the energy market work better for consumers, having almost trebled the number of small suppliers since 2010, making people’s bills simpler to understand, and plans to introduce QR codes on energy bills to support one-click price comparisons. Energy and Climate Change Secretary Ed Davey said:
“Independent energy suppliers have already made a breakthrough in giving consumers new competitive options when compared with the Big 6. But we want to go further and by working with these smaller challenger firms, and by making it easier for them to work with us, we can embed progress and extend the benefits to more people in Britain.”
The Big Six Energy Suppliers in Britain are generally taken to be Britain’s largest energy Suppliers, supplying gas and electricity to over 50 million homes and businesses in Britain. The “Big Six” as the term has most often been used, thus comprises stock market listed Centrica-owned British Gas, EDF Energy which is owned by the stock-market-listed European energy firm based in France (Électricité de France), the two German-owned firms npower and E.ON UK, the Spanish-owned Scottish Power, and the listed Scottish firm SSE.Despite nearly trebling the number of independent suppliers since 2010, the Big Six still control the majority of the market and consumers are faced with limited choice and competition. That is why these commitments are designed to deliver a level playing field on which smaller suppliers are able to compete with large established suppliers:
- Create an online resource for independent energy suppliers to improve communications with the Government.
- Reduce burdens imposed by industry codes and processes that can put independent suppliers at a competitive disadvantage.
Last week the Competition and Markets Authority announced that it would carry out an investigation into competition, following a referral by Ofgem, including barriers to entry and growth, and transparency in the retail energy market, which is crucial to rebuilding consumer trust. The Government will continue to work with independent suppliers on the proposals for improving engagement with them.
