New regulations aim to make energy market more competitive
Large energy firms will have to begin publishing wholesale prices up to two years in advance to avoid being fined
As of 31 March, new rules will come into force meaning the big six energy suppliers and the largest independent generators, will have trade more openly in the wholesale energy market.
The latter will be required to publish energy trade prices up to two years in advance, twice a day. This should make it easier for market entrants to trade and compete with their more established competitors.
‘Vital for breaking down barriers for new entrants’
Director of Consumer Policy at uSwitch Ann Robinson welcomed the move: “This is a step in the right direction for improving competition and transparency for consumers. These measures are vital for breaking down barriers for new entrants and allowing small suppliers to enter and compete more effectively in the market.
“The fact that the big six will, from March, have to publish wholesale power prices two years in advance, will not only reduce the risk involved in taking on new customers, but will also make it easier for smaller suppliers to trade in an open and transparent market.”
‘With almost a £300 difference between tariffs on the market, it’s vital that consumers shop around’
“A more competitive market will provide consumers with even more choice. While many of the big six are struggling to rebuild relationships and trust, several small suppliers are already offering cash-strapped consumers attractive deals, market-leading tariffs and great service.
“It’s in everyone’s interests to see more of this. With almost a £300 difference between the cheapest and most expensive tariffs on the market, it’s vital that consumers shop around and ensure they are on the best tariff for their needs,” added Robinson.
‘Getting easier for consumers to pick out the best deals’
CEO of Ofgem Andrew Wright commented: “Our rules for a simpler, clearer, fairer energy market are coming into force, meaning that it is getting easier for consumers to pick out the best deals. Now we are also breaking down barriers to competition for new entrant suppliers.
“These reforms give independent suppliers, generators and new entrants to the market, both the visibility of prices and opportunities to trade that they need to compete with the largest energy suppliers. Almost two million customers are with independent suppliers, and we expect these reforms to help these suppliers and any new entrants to grow.”
Wright added that the reforms were also aimed at ensuring information on costs, revenues and profits for the big six, were clearly presented to customers.