Ofgem Fines npower £2m

Posted on October 31, 2011 by Emma

Ofgem has fined the energy provider npower £2 million for failing to handle customer complaints correctly.

After British Gas was fined £2.5 million for a similar failing earlier this year, npower has been fined £2 million for not handling complaints properly and failing to provide those complaining with the details of the Energy Ombudsman’s redress service.

Ofgem found that npower did not record the required details for complaints by domestic and microbusiness customers. The energy company also failed to implement policies and processes for dealing with complaints efficiently and within a certain time.

Speaking from Ofgem, Sarah Harrison, senior partner for Sustainable Development said, “Consumers have a right to expect that energy companies will comply with the standards. npower failed to do so and although it took remedial action, it has incurred a penalty for failing consumers”.

She added “Energy suppliers now have a golden opportunity to convince consumers that they can be trusted, by getting behind Ofgem’s sweeping reforms for the retail market. This is the quickest way of restoring consumer trust in an industry badly tarnished by poor supplier behaviour”.

In response an npower spokesman said “We are very sorry, we let our high standards slip on this occasion. A small number of processes were not correctly adhered to. We have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first”.

Ofgem is also investigating the way EDF Energy handles customer complaints. Utility Exchange reported earlier this year that British Gas had been fined £2.5m for a similar offence.

New regulations for handling complaints were introduced by Ofgem in 2008 and a minimum standard which customers could expect was set out.

All of the Big Six energy companies have increased their gas and electricity prices over the last few months and npower increased its average gas tariffs by 15.7% and electricity by 7.2% this month blaming the increase on wholesale power prices. It’s not just domestic prices which have increased though, business electricity prices and gas tariffs have also increased over the last few months.

Will RWE Quit Building New UK Nuclear Power Plants?

Posted on October 29, 2011 by Kathryn

Part of the Government’s energy policy includes the construction of new nuclear power plants but this looks increasingly to be in jeopardy as RWE npower considers withdrawing from plans to build new nuclear power plants in the UK.

RWE, the German utility company which owns npower, is to conduct an internal review of plans to build two nuclear power stations in the UK. The news comes only weeks after Scottish & Southern Energy (SSE) decided to pull out of plans to build a new nuclear power plant in Cumbria.

Utility Exchange reported recently that the Government was planning to spend £15bn on undersea cables to connect the UK to Europe so that it can import electricity to avoid any power blackouts in the future. The concerns over possible blackouts will surely intensify if energy providers such as RWE npower and SSE decide against building new nuclear power plants. There will also be questions over how much this will impact on business electricity prices.

Nuclear power is part of the Government’s low carbon agenda but at the Conservative Party Conference, the Chancellor, George Osborne, disputed how affordable this low carbon plan is at a time when the country is facing serious financial constraints.

The Government has spent time encouraging energy companies to build new nuclear power plants but as well as the cost, the Government is also facing the fact that other countries including Japan and Germany are abandoning nuclear power after the Fukushima disaster earlier this year.

The closure of German nuclear power plants looks set to cause serious financial problems for RWE which could mean they abandon plans to build new plants at Wylfa in Wales and Oldbury in Gloucestershire. The Wylfa and Oldbury projects are a joint venture with E.ON under the name of Horizon Nuclear Power. RWE however, is also looking at a possible deal with Gazprom, the Russian gas giant. Consequently, if RWE and Gazprom become involved the gas giant is unlikely to be happy with RWE being involved in UK nuclear power.

Volker Beckers, CEO of RWE npower said in response to a report from the Chief Nuclear Inspector “New nuclear will be an important part of the UK’s future energy mix and RWE npower intends to be part of that future through our Horizon venture”.

This implies that despite the rumours, RWE intends to continue with its nuclear projects in the UK.

Facebook Chooses Sweden For Cheap Electricity Prices

Posted on October 28, 2011 by Ollie

Facebook is to build a datacentre in Sweden which will be powered largely by cheap electricity from sources of renewable energy.

The datacentre is the first one to be built by Facebook outside of the United States and will manage data processing from millions of users in Europe, the Middle East and Africa.

The centre will be built 100km from the Arctic Circle in Lulea, northern Sweden. Facebook said it had chosen Sweden because it had a good network of renewable energy but the cold climate also helps to keep the servers cool.

The company looked at a number of different sites in Sweden but chose Lulea as it has the cheapest business electricity prices in Europe because it’s so close to sources of hydroelectric power.

A spokesman for Facebook said “It is our first data centre to draw its power primarily from renewables, and it features design evolutions like a 70% reduction in our reliance on backup generators”.

The IT sector is one of the quickest expanding consumers of electricity in the world as more and more data centres are constructed. Facebook’s data centres in the US are said to use the same amount of electricity as 30,000 homes.

Director of site operations for Facebook, Tom Furlong, said “We concluded that Lulea offered the best package of resources, including a suitable climate for environmental cooling, clean power resources, available land, talented regional workforce and supportive business and corporate environment”.

The news that Facebook has chosen to build its new data centre in Sweden because the electricity is cheaper there comes as the EEF, the manufacturers’ organisation, reported that energy intensive industries in the UK are paying higher business electricity prices than similar industries in Europe.

The EEF said that high energy users in Britain are paying around 10% more for their business electricity and predict that over the next two years this will increase to 15% as the carbon floor price is introduced.

The EEF wants the Chancellor to introduce measures to help big industry. In Germany similar industries receive 98.5% on a renewable energy levy while UK industries don’t have any similar benefits.

Such decisions will impact on whether manufacturers will invest further in the UK or move their production to Europe. If Facebook has made the decision to build a new facility in an area with cheap electricity prices then this may be something which other energy intensive industries will take into account when considering future investment.

British Gas Measures To Reduce Winter Energy Bills

Posted on October 27, 2011 by Kathryn

British Gas is aware that households and businesses are struggling with higher energy bills and has therefore announced measures to help reduce winter energy bills.

British Gas has announced measures to help customers keep their homes warm this winter along with helping them to save energy and reducing their energy bills.

British Gas has been working with its Customer Board to develop the British Gas “Warmer Winter” package which includes a commitment not to increase energy prices again this winter, a discount for low income customers, a free insulation offer and flexible payments plans.

British Gas will also introduce a Tariff Checker to ensure customers are on the best deal for them and will mail all customers to ensure they get all the benefits and rewards available to them.

The Warmer Winter package is designed to help over one and half million homes and includes a commitment to keep prices down and British Gas has said it is committed to keeping its energy prices down for variable rate customers during the winter.

In its announcement British Gas said it had the broadest eligibility criteria for the Warm Homes Discount Scheme. British Gas said that all customers who met the criteria for the scheme and who applied before the end of January next year would receive £120 off their winter electricity bills.

British Gas is also extending its offer on insulation. Customers will now have until 22^nd December 2011 to sign up for free loft and cavity wall insulation. This insulation is worth around £200 and should save households over £200 on their dual fuel bill. British Gas will contact all of its customers to ensure they are on the correct tariff and that they are getting all the discounts, rewards and benefits that they are entitled to.

But it’s not just households that British Gas is helping. British Gas has also set up a team to help businesses and organisations that may be struggling with paying bills as a result of increases in business gas prices and electricity prices. British Gas experts will help advise on billing, debt, energy efficiency and flexible payment plans.

Councils Turn Off The Lights As Business Electricity Prices Rise

Posted on October 26, 2011 by Emma

Rising business electricity prices have forced councils across the country to cut back on street lighting to save money.

Increases in energy prices are not just affecting households. Councils across the UK have cut back on street lighting or are considering reducing street lighting in their area as they try to save money in the face of rising business electricity prices.

It’s not just remote areas that are facing darker nights. Lights are being turned off in streets in cities, suburbs as well as rural areas. However, there are concerns that the new imposed darkness will increase the number of road traffic accidents and crime.

Of the 133 local authorities who responded to the survey 98 said they planned to cut back on street lighting or were considering doing so. In some areas lights will be turned off altogether whereas in other areas lights may be just dimmed or turned off during “quiet” periods. There’s even the possibility that in some areas CCTV operators will monitor street and dim lights or brighten them when they deem it necessary.

Everyone is facing higher energy bills as energy providers blame higher wholesale gas prices for increases. Councils also face higher business electricity prices and unless they take action to reduce their costs it will be the tax payer who pays in the form of higher council tax charges.

Councils say rising business energy prices have meant that they now have to take this drastic action which will help to cut energy costs and help with meeting climate change targets.

As expected, in areas where the lights are being turned off, there have been a lot of complaints. Many people say it will lead to higher crime rates but in areas where it was tried last year councils said there was no evidence for this.

A spokesman for the Police Federation said lighting does help to reduce crime in an area. He said “The cuts could well mean that back streets and outer areas become a more fertile area for criminals to become more active in. The lighter an area is, the safer it is for public safety, pedestrians and indeed, motorists”.