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Green energy firms to meet with Huhne over Big Six dominance

Green energy news – by GreenWise staff
6th July 2011
Green energy firms and other small suppliers are to meet with Energy Secretary Chris Huhne to discuss ways to break the hold the Big Six have over the UK gas and electricity market.
With just days to go before the Government's White Paper on Electricity Market Reform (EMR) is published, independent suppliers including Ecotricity, Good Energy, First Utility, Ovo Energy, Utilita and Co-op Energy will attend what is being described as a "summit" with Huhne on Thursday. The meeting will look at what help the Government can do to boost competition in the UK energy market and keep prices for households down. As well as barriers to entry and growth, it will explore issues such as wholesale liquidity in the electricity market, the impact of Government environmental and social programmes, and market complexity.

"Our energy market has been too cosy for too long," said Huhne. "I’m calling a summit of independent energy suppliers so the small guys have an equal chance to bid for your business. We need more competition to keep bills down – it is madness that 99 per cent of people get their energy from the Big Six."

Price hikes
The Big Six energy suppliers are British Gas, Scottish Power, Scottish and Southern Energy, E.ON, EDF and RWE Npower. They have been accused by energy regulator Ofgem of adjusting prices "in response to rising costs more quickly than they reduced them when costs fell". Last month, Scottish Power announced it was raising its electricity and gas prices by between 10 and 19 per cent. 

Indie suppliers have been trying to shake up the market with innovative and green products, as well as cheaper tariffs, but so far have failed to break the stranglehold of the Big Six. Currently, none of these smaller players have more than 50,000 customers. 

"By meeting directly with the up-and-coming small energy suppliers we can ensure they have a fairer shot at breaking the dominance of the Big Six. I’ve told my officials to knuckle down with Ofgem and make reforms so consumers can have more choice and better deals for their gas and electricity."

Electricity market reform
Through its EMR, the Government is proposing the biggest shake-up of the UK's electricity market in a generation. To keep the lights and combat climate change, the Government must invest £110 billion over the next 10 years to upgrade the UK's ageing energy infrastructure. Encouraging more competition within the market is one way of doing this. 

Last month, the Department of Energy and Climate Change (DECC) announced it was cutting red tape for smaller companies allowing those with 250,000 customers or fewer not have to take part in two Government programmes – the Carbon Emissions Reduction Target and the Community Energy Saving Programme.

In May, Co-op Energy officially launched against the Big Six, promising a "fairer" deal to customers. And today, First Utility announced it was teaming up with US efficiency and smart grid software company OPower to offer a new home energy management service for its customers. If intstalled in all UK homes, the two companies said it could cut energy costs by £400 million. 

"The current market simply can’t deliver, so we need more companies and more competition to keep price rises as low as possible," Huhne said. 

Ofgem will also be attending tomorrow's summit.

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Green energy firms to meet with Huhne over Big Six dominance
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