The 'Big Six' energy suppliers have rounded on the Government's electricity market reforms by saying they will force up energy bills.
Energy Minister, Chris Huhne, admitted this week consumers 'will need to pay to secure a low carbon future' when he presented his energy white paper to Parliament.
However, well before the minister had spoken both British Gas and ScottishPower had already raised prices well above inflation.
British Gas parent firm Centrica Energy's managing director, Mark Hanafin, called the ERM an 'important step' that will 'come at a cost'.
He said: "There remains much detail to resolve so that investors can have confidence that the tax and regulatory environment makes the UK energy sector a good place to invest.
"These measures come at a cost and it is vital that all of us - Government, regulators and the industry - are open and transparent with the public about the true impact of these changes."
Energy companies also found themselves in the news this week as consumer groups and news-outlets hit out at suppliers due to planned increases. This month according to the Telegraph, British Gas raised their prices by an average of 16% for electricity and 18% for gas; similarly, Scottish power also raised their prices by 19% for gas and 10% electricity. Consumers are now being advised to go out and compare energy prices in order to secure the best deal for the future.
It is a case of two down, four to go when it comes to energy providers announcing price rises. A month ago Scottish Power made the first move to inflict double-digit price hikes on its customers, and last week it was the turn of British Gas to pile on the misery for millions of households whose finances are getting squeezed by the day.
Once the other providers npower, E.ON, EDF and Scottish and Southern Energy make their move – and they undoubtedly will – it will mean that the average dual fuel bill will have increased by 50 per cent since 2007 to around £1,450, including 20 per cent rises this year.
Source: Preparing for Peak Oil: Local Authorities and the Energy Crisis report www.odac-info.org/
The energy sector has been in the news a lot recently. Yesterday the embattled Energy Secretary Chris Huhne made a statement to the House of Commons, outlining the government’s roadmap for future of utility companies and UK power generation. The white paper entitled ‘Electricity Market Reform White Paper 2011’ was presented to the House and advocated that the current production of renewable power should be quadrupled by 2020.
Though this statement was supported by a number of lobbyists and environmentalists, it all received a number of critical reviews from the ‘big-six’, claiming that the government’s new proposals would end up driving consumer energy bills higher.
Six energy companies supply around 99% of customers in the UK. Alongside action by Ofgem to improve liquidity, these reforms will boost competition within the market.