The Energy Bill will receive its third reading in the House of Commons today. Included in this bill is Retail Market Reform, creating a fairer market for the consumer by reducing the number of tariffs to four. Except for the special switching tariffs that can be created for any number of collective switching campaigns. Unfortunately, for the consumer, reform will not bring more value for money, because 6 energy suppliers control 99% of the market, which technically is an oligopoly. The cost of implementing the new Retail Market Reform will be passed onto the consumer by the energy suppliers at an estimated one off cost of £2.18 and £2.52 per year per customer.
Simplifying the tariffs won’t lead to empowering consumer choice nor will it lead to sustainable, long term reductions in consumer prices. This is confirmed by DECC and OFGEM who have conceded that prices will rise to finance new nuclear power stations. On a more positive note, long suffering Britons, the 80% of us who don’t switch suppliers and are paying old tariffs, may save around £158 per year by switching supplier. As a whole though, temporary price differences will not release the stranglehold that the energy suppliers have on us. OFGEM is also proposing that the White Label suppliers, like M&S Energy and Co-op Energy, adopt the same pricing as the Big Six, basically eliminating any capability of using operating efficiency and sustainability strategies to lower energy prices for good.
The Energy bill is primarily informed by the Big Six (oligopoly) and the National Grid (monopoly), seven powerful corporations owned by private shareholders, run by captains of industry that wield the most power over the politicans that set our energy future. Energy is a necessity, it should be a national right. However, the allure of privatisation, money to prop up State coffers, was too strong. Liberalisation of energy markets is now paving a bleak pathway to our clean energy future.
Further solidifying their dominant position, a two pronged tour de force in underway against competition in the market at OFGEM in their Retail Market Reform. We are facing the prospect of the legislative death of micro-generation – the source of freedom for the people and our greatest source of energy security – by killing off communities energy suppliers ability to enter into the market. It is very expensive to retain a centralised power generation system. It is essential that we have them, for large industry and for back up power. However, this old method of delivering energy is greatly impacting our real security, which is our right to clean land, clean air and a moderate climate. The Energy Bill includes unproven and low value for money generation technologies, like the new EPR nuclear power stations and Carbon Capture and Storage (CCS) technologies. CCS doesn’t generate any energy at all, it’s just an add-on cost to an existing generation method. With centralised power stations, the energy supplier has complete control over our energy costs.
The Energy Bill contains new mechanisms for financing these costly technologies, basically removing transparency by transferring the generation cost from your energy bill to your tax bill. In an age of austerity, this means that more social benefits will be cut as the public is squeezed to finance the liability for nuclear waste storage and the cost of maintaining national security around nuclear power plant sites and the transport of nuclear waste (depleted uranium from spent fuel rods is used to develop nuclear weapons). Plus the support that will inevitably be required when construction is started on power stations using unproven technologies.
Last year DECC gave us a chance to look at our energy pathway to 2050, which was a model to help people do their own analysis of energy supply and how best to keep the lights on. This pathway made it clear that renewables, including micro-generation, could play a vital role in ensuring that we maintain energy security. Micro-generation are systems less than 5MW that community energy groups, like BHESCo are developing across the country
A free energy market is one that has few barriers to entry and encourages traders to compete in all aspects of their operations, from generation to distribution to customer care. Customer care includes a level of service that prioritises the customer experience. Smaller community energy companies can do this. Right now an opinion has developed within OFGEM, the electricity and gas market regulator, that could snuff out small community energy companies, like BHESCo, by creating more barriers to market entry for White label suppliers. Support BHESCo by ensuring that your MP rejects these aspects of Retail Market Reform in the Energy Bill. We need a fair and secure energy supply, which the energy bill in its present form will not deliver.