EDF Energy Follows Rest Of Big Six And Increases Gas & Electricity Prices
EDF Energy has become the last of the Big Six energy providers to increase gas and electricity prices after it announced gas prices would increase by 15.4% and electricity prices by an average of 4.5%.
EDF Energy is the last of the Big Six energy suppliers, which includes E.ON, npower, Scottish Power, Scottish & Southern Energy and British Gas, to announce price rises. The company has today announced it has limited price rises to the lowest level of any of the other Big Six suppliers.
EDF says the company will remain the cheapest dual fuel supplier based on the national average of regional prices. According to the supplier, dual fuel bills will be as much as £53 a year cheaper than the rest of the Big Six. However, the energy regulator Ofgem is to look at whether higher energy prices are warranted.
The increased prices will come into effect on the 10 November, almost three months after British Gas and Scottish Power raised their prices. Last winter EDF froze prices promising not to increase them until March and it was true to its word as reported at the time by Utility Exchange.
The chief executive of EDF Energy, Vincent de Rivaz, said “We have absorbed rising wholesale energy, network and other costs as long as possible but must reluctantly now pass some of these through to consumers. However, unlike some other suppliers we have been able to give protection to our customers, particularly for their electricity consumption, because of our choice to invest in low carbon nuclear generation, which enjoys stable costs compared to gas and coal and has had a strong performance this year”.
He continued “Our announcement shows how the integration of supply and generation businesses supported by investment in low carbon nuclear power can deliver benefits for customers”.
Mr de Rivaz said there was a lot of suspicion and lack of understanding of the energy industry amongst the public, regulators and politicians and that it was important this was addressed. He said “The energy challenges Britain faces are far too important and can only be addressed in a world with trust, open dialogue and mutual understanding. If a Competition Commission inquiry is necessary to build this trust, then it is a step that should be taken. We would welcome the opportunity to explore all the issues fully and openly. As a fair company, we have nothing to hide”.
The rising cost of energy shows the importance of comparing not just domestic energy prices but also business gas prices and business electricity prices. The number of households and businesses who don’t bother to compare prices is still high and consumers could reduce their business energy costs by as much as 70% if they took the time to compare prices.
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SSE Announces Increase In Gas & Electricity Prices
As Utility Exchange predicted another of the “big six” energy providers, Scottish & Southern Energy (SSE) has announced it is raising gas and electricity prices.
SSE becomes the third provider to announce huge price increases after ScottishPower and British Gas led the way. SSE will increase gas prices by an average of 18% and electricity prices by 11% from September 14. The price rise will mean the average dual fuel bill will increase from £1094 to £1265.
SSE has blamed the high wholesale gas prices for its decision to increase gas and electricity prices. It added that the price increases also reflected the higher costs involved in using energy networks and the cost of social and environmental schemes. On the bright side, SSE said it won’t increase prices again until August 1 2012.
The chief executive of Scottish & Southern, Ian Marchant, said “I am sorry that we have had to announce an increase in household energy prices at a time when many people’s budgets are under strain, but the upward pressures on prices have become too great”.
SSE last raised prices in December and since then the wholesale price of electricity has risen by 23% while the wholesale cost of gas has gone up by 40%. Not only that but consumption has fallen since April as a result of the warmer weather (and increased prices?) and as a result households are using 2.9% less electricity and 5.8% less gas.
Utility Exchange reported earlier this month that British Gas was to increase its prices from August and warned that it was only a matter of time before the other energy providers followed suit and increased gas and electricity prices. While these price rises relate to domestic users at the moment it’s only a matter of time before business gas prices and business electricity prices go up. Therefore if your business energy contract is due for renewal don’t get rolled over into an expensive contract – compare business gas and business electricity prices to ensure you’re on the correct tariff.
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Switch To Fixed Rate Tariff Now To Avoid Energy Price Increases
Utility Exchange has been warning for some time that energy bills are going to rise again and consumers are being advised to switch to fixed rate tariffs now before more energy companies increase their prices.
So far British Gas and ScottishPower have raised gas and electricity prices but the other energy providers are expected to follow suit and consumers are being advised to switch to fixed rate gas and electricity tariffs now.
Utility Exchange reported last week that British Gas had increased gas prices by 18% and electricity prices by 16% less than a year since it increased prices by 7%. It means the average customer will face an extra £200 on their dual fuel bill.
The other big six energy suppliers are expected to follow suit and it’s only a matter of time before we see price increases from E.ON, EDF, Scottish and Southern and npower. Energy companies have blamed price rises on increased wholesale energy costs – prices have risen 30% since last winter.
Energy companies know that most of their customers won’t bother to compare prices and switch but it’s never been more important and it could save around £200 a year. Some of the best deals available at the moment come from EDF, npower and Ovo Energy.
Meanwhile, Ofgem is investigating the big six energy companies because there are complaints that they increase fuel prices quicker than they lower them. There’s a suggestion that some energy providers get their electricity and gas cheaper than their competitors which undermines the argument that they are all facing increases in wholesale commodity prices. Despite energy companies arguing that wholesale costs have increased they have done so only after prices fell from their highs in 2008. Wholesale costs are still not as high as those in July 2008 when they peaked.
Until competition increases in the energy market and this competition helps to lower prices the only way to try to reduce the impact of price rises is to compare and switch gas and electricity providers. While business electricity and business gas prices haven’t seen such big increases (in fact Utility Exchange has had slightly lower British Gas Business gas prices and lower E.ON business electricity prices in recent weeks) it’s only a matter of time before business tariffs start to increase so if your energy contract is due for renewal, compare and switch to a better deal.
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British Gas Chairman Warns Of More Gas And Electricity Prices Rises
The chairman of British Gas has again warned of gas and electricity price rises as energy suppliers pass on high wholesale price increases.
Sir Roger Carr told The Sunday Telegraph that households should prepare for price rises in the region of the Scottish Power price hike last week. Utility Exchange reported last week that Scottish Power was set to increase gas prices by 19% and electricity prices by 10% from 1 August.
Sir Roger said wholesale prices had risen by more than 20% and it was therefore no surprise that Scottish Power had increased their prices by a similar amount.
He warned that unless wholesale energy prices went down there would be further price rises from other energy suppliers similar to those proposed by Scottish Power.
He said “Moving wholesale prices have been very material, well over 20pc, in recent months. In those circumstances, it is just a commercial fact that those things convert into price increases. It’s high. Nobody likes higher prices but it’s passing on costs which nobody can avoid”.
Many people blame an increased demand for gas on high prices but others have argued that it’s actually energy trading speculation that has forced wholesale prices up.
However, Sir Roger doesn’t agree with this position and said “There’s no doubt that the energy price is utterly related to the global position. We’re seeing huge demand for energy in those countries that are growing very rapidly and there doesn’t appear to be any foreseeable change in that in the short-term”.
Utility Exchange reported last week that some critics had blamed hidden green taxes for the rise in energy bills but Sir Roger again disagreed. He said it was inevitable that some of the costs involved in moving towards a low carbon economy should be recouped from customers’ bills. He said “Ofgem has said that it would see over the next decade a dual fee bill going up by about £500 a year for a typical consumer and that’s related to decarbonisation rather than market forces”.
In response to Sir Roger’s warning of price hikes the energy secretary, Chris Huhne, said customers should not take price rises lying down but hit energy providers where it hurts and move to a cheaper supplier. He said “Consumers don’t have to take price increases lying down. If an energy company hits you with a price increase, you can hit them back where it hurts – by shopping around and voting with your feet”.
This obviously applies to business customers as well as domestic energy users. It’s important to compare business gas prices and business electricity deals and switch to a cheaper supplier.
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British Gas Offers £400 In Boiler Scrappage Scheme
The British gas boiler scrappage scheme is back, for a month with the gas provider offering £400 to anyone who trades in their old boiler.
British Gas will offer £400 to anyone trading in their inefficient boiler for a more energy efficient model but there’s only a month to apply.
The British Gas boiler scrappage scheme will last for a month until 30th June 2011. Under the scrappage scheme British Gas will replace G-rated boilers with an A-rated model and customers will receive £400 off any of their Worcester range boilers or £200 off other boiler models.
But how do you know if you have a G-rated boiler? One way of telling if you have an older, inefficient boiler, is to check if it has a pilot light which is on all the time. If it does then it’s likely that it’s a G-rated boiler.
But basically if it’s a gas fired boiler and is over 15 years old, it’s likely to be eligible for the scrappage scheme. If it’s an oil fired boiler and over 20 years old then this too will be eligible for the scrappage scheme. In fact British Gas estimates that around 3.5 million boilers in the UK could be eligible for its scrappage scheme.
To qualify for the scheme you don’t even have to be a British Gas customer. The gas supplier has also said that customers don’t have to sign up to any other services such gas and electricity or any particular energy tariff to qualify.
So long as customers meet the criteria and they then decide to buy a new boiler, they will benefit from £400 off the cost of a new boiler. A British Gas spokeswoman said the boilers used in the scheme start at around £2,000, including installation.
However, changing to a more energy efficient model should reduce gas bills because they use less fuel, although it’s suggested that the pay-back time for the boiler could take around 8 years.
At the beginning of 2010 the Government ran a boiler scrappage scheme which several energy suppliers contributed to. Many either offered their own scrappage scheme or matched the Government’s scrappage allowance. It means other energy providers may follow British Gas and offer a boiler scrappage scheme – we’ll keep you informed if they do.
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Centrica Buys Family Plumbing Firm PH Jones
Centrica, the owner of British Gas, has bought a family plumbing company for £30 million.
Centrica has bought two thirds of a family plumbing business, PH Jones, run by Mr Jones and his wife for nearly 50 years, for £30 million.
Centrica is buying the plumbing company to add weight to its Community Energy division. This is the social housing division which provides central heating services for around 250,000 properties. It also installs over 8,000 central heating systems over the course of a year.
Mr and Mrs Jones’ two sons will continue to run the remaining utility services division of the company which has a turnover of around £15m a year. Martin Jones said “Having nurtured and successfully grown the business for nearly 50 years, the time is right for mum and dad to exit the company and enjoy a well-earned retirement”. He continued “We’ve built this business on strong family values and these have been the foundation of its success”.
The brothers will now concentrate on the growing smart metering business with plans to double turnover by 2014. Martin Jones said “By solely concentrating on metering services, our aim is to continuously improve the service delivery”.
While the Jones brothers will retain 250 engineers and 50 support staff, 850 workers will transfer to British Gas.
Centrica said the new business would improve its social housing energy services business. It added that it would also help social housing companies to reduce residents’ energy consumption, carbon emissions and energy bills.
The Managing Director of British Gas Community Energy, Betsy Bassis, said “The acquisition of PH Jones significantly accelerates our growth strategy. PH Jones is a successful, profitable company in this sector and combining its strengths with those of British Gas will deliver important benefits for our customers”.
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Centrica May Shut Down Gas Fields Because Of New Oil & Gas Tax
Centrica has said it may have to shut down one of its gas fields as a result of the new oil and gas tax introduced by the Chancellor in the last budget.
Centrica, which owns British Gas, has said that unless the Government changes its mind over the North Sea oil and gas tax, it may have to shut one of its gas fields in Morecombe Bay.
In the March Budget Mr Osborne raised the supplementary tax on oil and gas production from 20% to 32%. Utility Exchange has reported that experts have warned the Government that this new tax could cost the offshore oil and gas industry £50m.
Centrica has three gas fields in Morecombe Bay. The energy provider has warned that one of the fields which has been closed for maintenance may not be re-opened. The Morecombe Bay North and Rivers gas fields are closed for planned maintenance which should last for four weeks. However, it’s the South Morecombe field which is undergoing maintenance which may not be re-opened.
Centrica has said that the new tax may mean that it’s cheaper for them to buy gas on the wholesale market and therefore may not re-open the gas field.
A spokesman for Centrica said “Following the increase in supplementary corporation tax in the Budget, UK oil and gas producing fields are now subject to some of the highest levels of tax in the world – our South Morecambe field is now taxed at 81 per cent. At these higher tax rates, Morecambe’s profitability can be marginal”. He added “Accordingly, we may choose to buy gas for our customers in the wholesale markets in preference to restarting the field after planned maintenance”.
It’s the more mature oil and gas fields which will suffer the most as the result of the tax increase because profits on these fields will be taxed at 81%.
While the Morecombe Bay gas fields are not huge they do make a significant contribution to the UK producing around 6% of the UK’s annual gas requirements and 12% of residential gas demand. Centrica uses the Morecombe Bay gas fields when demand in the UK is at its highest and imported gas is expensive e.g. during the winter months. If Centrica does decide not to re-open the site it remains to be seen whether or not the decision will have a detrimental effect on both domestic and business gas prices. If it means the UK has to import more gas during the winter when gas prices are higher it could result in higher gas prices.
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Ofgem Wants Consumers To Compare Gas And Electricity Prices To Save On Energy Bills
It’s something that many of us have been saying for months but now Ofgem, the energy regulator, has added its own voice and said failure to compare gas and electricity prices could mean consumers pay an extra £170 a year for their energy.
There are many energy price comparison sites now and Ofgem says consumers who don’t shop around and compare prices are missing out on some of the most attractive deals.
Ofgem is launching a new element to its Energy Best Deal campaign. This campaign offers advice on cutting energy bills from the Citizens Advice Bureau in England and Wales.
The new addition to the campaign includes video guides to raise understanding of consumers’ rights. The videos include advice on dealing with doorstep sellers, debt and disconnection and getting help with paying energy bills.
From Ofgem, Sarah Harrison said “Our latest research shows that consumers who are not active in the market are paying on average around £170 a year more than they have to”.
She explained that the Energy Best Deal “is here to help the four out of five consumers who say they are not taking part in the energy market to shop around to get a better deal”.
Consumer Focus, which runs a similar scheme in Scotland, was pleased with the extra help for consumers. From Consumer Focus Audrey Gallacher said, “With energy just one of many rising household bills, customers will be keen to save extra pounds but may not know the best way to cut their costs”.
She added that comparing energy prices and switching supplier can make a huge difference, especially if the customer has never changed energy provider. Another way to save is to switch from paying by cash or cheque to direct debit.
This scheme from Ofgem will help customers who are confused by all the different tariffs available in the energy market.
It’s surprising the number of people and businesses that have never switched to another provider – or even compared energy prices. Many still don’t get their gas and electricity from the same supplier and therefore don’t benefit from the cheapest dual fuel deals.
As a business or a domestic power user, if you want to save money on your gas and electricity bills it’s important to compare prices.
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Ofgem Forces Gas & Electricity Providers To Give 30 Days Notice Of Price Increase
New Ofgem rules will mean energy providers will have to give their customers 30 days notice before they increase electricity and gas prices.
Electricity and gas suppliers have been forced to ensure customers get 30 days notice of any price increases. Previously energy firms were allowed to write to customers as long as 65 days after a price rise. However, Ofgem has ordered energy companies to provide customers with prior warning of any increases to give them time to compare gas and electricity prices and switch to a new supplier.
The rules introduced by Ofgem will mean that energy firms will have to give customers advanced warning of any changes in price which will leave them worse off.
Energy companies have recently increased business gas prices, business electricity prices and domestic prices because, they say, of the rising cost of wholesale gas and electricity. However, last week Ofgem revealed they had found evidence that providers were increasing prices faster than they lowered them when wholesale prices dropped.
The senior partner for markets at Ofgem, Andrew Wright said, “Today’s changes will again show that we are serious about making sure suppliers play it straight with consumers. We believe that 30 days’ advance notification of price increases, coupled with our new proposals for more transparency and an end to complex tariffs, will give consumers more power to make informed switching choices”.
The new pricing regulations will come into effect from 28 April. Ofgem proposed these changes back in September and since then some energy suppliers have started to give customers more advanced notice of price rises.
British Gas said it gave customers 30 days notice when it increased prices at the beginning of December while Scottish & Southern said it gave customers 30 days notice when it announced price rises at the end of October.
Even if your energy company hasn’t increased prices it’s still advisable to compare business gas rates and electricity prices so that you can switch to a cheaper supplier especially if your business energy contract is due for renewal.
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Japan Nuclear Crisis Will Benefit Gas As Energy Markets Reject Nuclear Power
The nuclear crisis in Japan is set to permanently change energy markets as countries move away from nuclear energy and the demand for gas increases.
There’s been an excess of gas for a while now which has helped to keep prices low but the Japanese nuclear crisis is set to see a move away from nuclear energy – and gas will be the fuel of choice to replace it. However, as a result demand for gas will increase and consequently so will gas prices and electricity costs.
One of the fastest growing economies is China – requiring energy to fuel economic growth, but China has suspended new nuclear plant approvals as a result of the Japanese crisis. It had 25 new plants planned and 12 are in the process of being built. If the Chinese government decides not to go ahead with the new nuclear plants it will have to turn to another form of energy generation and that’s likely to be gas.
The head of alternative energy for HSBC, Robert Clover said “We believe that events at Fukushima could damage national energy policies in nuclear countries, with potentially both shut downs of existing nuclear plants and fewer new nuclear installations”. He added “We expect that nuclear loss could be natural gas, energy efficiency and renewable’s gain”.
He said that the Japanese crisis would mean that there would be even higher safety standards required for new builds while existing facilities would have to be improved but these extra costs would make nuclear less economical and possibly completely uneconomic. Mr Clover said that as a result prices of liquefied natural gas (LNG) will increase as countries move towards gas for generating electricity.
Meanwhile an energy analyst at Matrix, Adam Forsyth, thinks that if countries change their energy policy then it will lead to higher UK gas and electricity prices. He said “With gas fired power stations normally the marginal source of generation capacity in the UK, this is likely to result in higher electricity prices”. It seems that in the long term domestic and business gas prices are not going to go back down.
Those benefitting from higher LNG prices include Shell and B G Group. Shell has just supplied two shipments of LNG to Japan to meet increased demand and in the long run will benefit from higher gas prices. Furthermore, business gas prices and business electricity prices are likely to increase, so if you have the opportunity to fix your business gas prices now is a good time to do it.