IPPR Calls For More Competition In Energy Industry

Posted on April 30, 2012 by Ollie

The IPPR (Institute for Public Policy Research) says that tough action is needed to improve competition in the energy industry and ensure consumers are charged a fair price.

The fact that six big energy companies have a stranglehold on the energy market in the UK means consumers will spend almost £2bn too much on their domestic energy by 2020, according to the IPPR report.

The IPPR says that efficiency savings by energy companies could help to lower energy bills. The IPPR report, The True Cost of Energy, shows that annual efficiency savings could save consumers £1.9bn by 2020. In 2010, Ofgem found that the energy company which was least efficient spent more than double that of the most efficient company on its operations per customer.

The IPPR says these saving would help to make up for the cost of green energy, which is also blamed for increasing energy bills.

The director of policy and external affairs at Consumer Focus, Adam Scorer, said “There are many improvements which can be made to this market, but a good start would be to ensure that smaller suppliers can compete with the big six on a level playing field. Customers also need to know that suppliers are really competing for their business by passing on efficiencies and wholesale cuts, as well as ensuring customer service is first rate”.

There are also complaints that energy providers charge their current customers more, in order to pay for cheap offers to entice new customers.

The Big Six energy companies argue that their profit margins are very small and they are simply responding to rising wholesale gas costs. And energy prices are not just increasing in this country. In Australia consumers are facing an increase of 8.3% in gas prices from tomorrow. Furthermore, it’s not just domestic energy which has gone up, business gas prices and electricity prices have also increased over recent months as third party costs have increased for energy suppliers.

Ofgem has proposed a number of measures to improve the industry. It’s also called on energy companies to be more transparent and cut the number of tariffs they offer to try to reduce confusion amongst consumers.

Cheap Wind Energy Needed To Lower Energy Bills

Posted on April 27, 2012 by Emma

Wind energy must get cheaper according to the Prime Minister, David Cameron, in order to ensure lower energy bills.

The cost of building onshore wind farms and developing other sources of renewable energy has fallen but both domestic and business energy bills are still increasing.

At the moment bills are some of the highest they have been largely as a result of high fossil fuel prices and green taxes. High wholesale gas prices are helping to keep domestic and business gas prices high.

All energy companies have to generate a certain amount of electricity from sources of renewable energy such as wind or solar. However, the cost of doing this is then passed on to the consumer. It’s these green taxes which Mr Cameron wants to see come down.

Speaking at the Clean Energy Ministerial meeting in London, Mr Cameron said “As costs fall so it is right that consumers should pay less in subsidies for new projects. We don’t just need greener energy – we need cheaper energy too”.

The cost of onshore wind, while still more expensive than gas, is now on a par with coal and nuclear power. The Government plans to double onshore wind capacity which is already at over 3,500 turbines and Mr Cameron said energy companies can get costs down further.

He said “We can get these costs down further. I really believe that more mature renewable technologies can be among our cheapest energy sources within years, not decades”.

However, according to the executive director at Which? the government needs to help to make energy bills lower. Richard Lloyd said “We welcome the Prime Minister discussing green policies and the need to be financially sustainable, but once again the Government seems to forget it also needs to be affordable for consumers who are the ones left picking up the bill”.

Meanwhile the Director of the Renewable Energy Foundation, Dr John Constable, said the cost of renewables is likely to go up rather than go down. He said “Income support to renewable electricity generators last year cost the consumer £1.5 billion, over half going to wind power, and by 2020 this will be around £8 billion a year”.

Russian Firm Could Build Two Nuclear Power Stations In UK

Posted on April 26, 2012 by Kathryn

Russia could help build two nuclear power stations in Britain after RWE and E.ON pulled out of a joint venture.

Russia’s state atomic energy corporation, Rosatom, is considering buying a stake in Horizon Nuclear Power, the company created by RWE and E.ON to build new plants in Britain.

Britain is committed to reducing carbon emissions and also needs to improve energy security so it may be that it goes ahead with Russian built power stations. Utility Exchange reported recently that E.ON and RWE had decided not to continue with their project to build two nuclear power stations blaming increased costs.

As North Sea gas and oil fields come to the end of their lives Britain has had to increase the amount of energy it imports. The Department of Energy & Climate Change says that now Britain imports 40% of its oil and gas. Furthermore there are concerns that there may be a shortfall of energy in just a few years’ time as nuclear power stations are shut down along with coal fired power stations.

Renewable power will not be advanced enough to fill this gap within the next few years but the country is still committed to reducing carbon emissions. Therefore it’s argued that nuclear power is the only low carbon option available.

Domestic and business electricity prices and gas prices continue to rise. A recent study by Liberum Capital, an investment bank, found that British energy bills are expected to increase by as much as 70% by 2020 as the energy gap increases. While nuclear power is controversial it may ensure UK energy security and help to slow rising energy prices.

Rosatom provides fuel for the Sizewell B nuclear power station in Suffolk and has been involved in decommissioning several nuclear sites in the country. The Rosatom press officer, Vladislav Bochkov, said “No other country in the world has Rosatom’s experience in building nuclear power plants. We have opened 20 nuclear power-generating units worldwide over the past 25 years and currently have 25.2 gigawatts of combined capacity in Russia. We are second only to France’s EDF in total capacity for generating electrical energy”.

Reduce Business Electricity Bills With Energy Saving Lighting

Posted on April 25, 2012 by Emma

Energy saving lighting is important for any business and not only can it help the environment but CFLs can help to reduce business electricity bills.

Saving electricity at work not only helps the environment but if you use less electricity then it’s going to mean reduced business electricity bills. With rising business electricity prices this can only be a good thing. But what kind of bulbs do you replace existing ones with?

Standard tungsten light bulbs should be replaced with CFLs. As has already been noted these reduce energy use by 75% but they also produce less unwanted heat and last around 8-10 times longer. In fact you can use modern CFLs for any display or task lighting.

If you have 38mm (T12) fluorescent tubes with in switch-start fittings you should replace them with the equivalent 26mm (T8) triphosphor fluorescent tubes with a lower wattage. These reduce energy consumption by around 8% and last longer.

Do you have spot or flood lights? Mains voltage reflector lamps, filament spot and flood type lights can be replaced with low-voltage tungsten halogen lights or metal halide discharge lights. These can reduce energy consumption by between 30-80%.

If you have fluorescent fittings with 2ft 40w and 8ft 125w fluorescent lamps then you can replace these with efficient fittings using reflectors or louvres. These save around 30-45% of energy and the reflector or louvre fittings help to improve lighting quality. The electronic control gear helps to get rid of flicker, hum and strobing effects, previously a problem with fluorescent lights.

One thing to remember regarding fluorescent lights: It’s often said that it’s better to leave them on as starting them up wastes more energy than if they stay permanently switched on. This is not true. They use only a few seconds worth of power to start up so it’s better to switch them off when leaving a room.

In addition to installing energy saving light bulbs it’s also a good idea to install occupancy sensors. These can be useful when people work late or when cleaners come in late at night. It means the lights only come on when somebody actually needs them. They can save up to 30% on lighting costs and are useful to have in toilets, storerooms or meeting rooms.

There are even daylight sensors which can be used to control lighting when there’s enough natural light not to need artificial light. They can be used to light signage or car parks and help significantly reduce business energy costs.

The amount of energy efficiency lighting around now means there’s no excuse not to make use of it and lower your business electricity bills.

E.ON Launches 7 Step Plan For Small Business Customers

Posted on April 24, 2012 by Ollie

E.ON has launched a 7 step plan for its small business customers to ensure small businesses get the best service possible from their energy supplier.

The 7 step plan aims to make energy easier for small businesses. It includes new industry standards for business gas and business electricity sales by energy brokers and a customer panel which will reflect the views of small businesses.

Utility Exchange reported at the end of 2011 that E.ON was to press the “Reset” button and review its relationship with customers. The energy supplier’s Reset Review was launched in January and every bit of its relationship with its customers was analysed – from bills and tariffs to how products are sold.

The chief executive of E.ON, Tony Cocker, said “…we’re pleased to announce a series of commitments for our small business customers which will help improve their overall experience; from finding the best product, managing their account and providing help when they need it”.

He added “One of our key aims continues to be the improvement of sales standards for small business customers across the entire industry, which is why we’re launching a full code of practice for business energy brokers and will be approaching other energy suppliers to invite them to sign up to this single code too”.

Changes already made and set to be made over the next few months include:

New Code of Practice:

A press release said “E.ON is launching a full Code of Practice for SME business energy brokers which sets out the standards it expects them to adhere to when selling to customers and hopes that other energy firms will adopt this single independent set of principles. The code will ensure the product offered is appropriate to the needs of the customer and make the entire sales process a more transparent and positive experience”. E.ON will work “with all of its SME business energy brokers/consultants to implement the set of principles as part of their sales processes and intends to operate these principles as standard from 31 July”.

Improved billing standards:

E.ON already tries to ensure bills are correct but in the cases where they are not the energy provider says it will protect small and medium sized businesses from large back bills. “E.ON will not back bill SME customers over three years and aims to reduce this to one year by the end of 2013”.

Fairer debt repayment:

In situations where small business customers get into debt E.ON will contact the customer early on and discuss their circumstances and repayment plans.

Smart metering:

E.ON has already installed a number of smart meters in business properties and aims to install another 2,500 by the end of the year.

Better Direct Debit policy:

E.ON is making changes to its Direct Debit policy for small businesses joining the company. Customers will have their fixed direct debit payments reviewed regularly to ensure their account balance is at zero on the anniversary of when they joined the company.

Contract renewal:

E.ON will ensure they improve communications with customers when they are due for renewal to make sure they can make an informed decision.

Bill improvements:

E.ON is looking at changing its bill format to make it clearer for small business customers.