1. Price cut? What price cut?
Let me take you back to a mystical place called February 2012. Ahh, those heady days when we thought it might not rain much in the summer ahead, where England have just been drawn in the same group as Wales for Euro 2012 raising fickle hopes, and where the UK’s major energy suppliers have just cut prices.
With energy bills at their highest level yet and the warnings around fuel poverty becoming more dire by the day, it’s easy to forget that this time last year we were eagerly expecting price cuts. First came a 5% gas-only price cut from SSE, then a 5% electricity-only cut from British Gas. Sure we grumbled, after all these cuts were a drop in the ocean compared to mega-hikes at the end of 2011, but maybe things were changing? Maybe there was light at the end of the price rise tunnel?
Eight months in the sunshine is not to be sniffed at, but just in time to catch the falling mercury came the inevitable price rises. SSE was first to the party yet again and E.ON was the only supplier to hold out until 2013, but the average energy bill is now at its highest ever level.
2. The Energy Bill
Like a certain Peter Jackson film the Energy Bill has taken a long time to arrive and yet still managed to come across as muddled and incomplete, leaving both energy investors and households confused. We assume any similarities between Ed Davey and Martin Freeman were purely coincidental.
So what do we know? The Energy Bill contains a strong commitment to the renewable sector, not least on-shore wind turbines, which has led to rifts within the coalition. What’s more, this commitment will add £100 to household bills, although increased reliance on renewables is expected to save us a similar amount.
We also know that the Energy Bill shirked one of its key responsibilities: to set a carbon target. A decision on what our carbon emission target for 2030 will look like has instead been pushed back to 2016 for the next government to deal with. Hmmm.
3. The regulator tries regulating
2012 was the year Ofgem grew teeth, but not enough bite. The year kicked off with a series of fines for energy suppliers for bad behaviour and the launch of its much-heralded Retail Market Review, pledging to overhaul the energy industry and make it clearer, fairer and more transparent. And, in an effort to help those most vulnerable to fuel poverty, Ofgem also made it easier for customers to switch their prepayment meters.
But despite their promises to crack down on the energy industry Ofgem came under increasing political pressure to do more, with some politicians even arguing that the regulator was defunct and needed to be replaced. Then came a round of unwelcome price rises from each of the ‘big six’ energy suppliers, prompting more criticism about the rising cost of energy. 2013 will be a big year for our regulator. Will it stay or will it go?
4. The rise of the small supplier
In all this talk of the ‘big six’ very little has been made of the ‘small 14’, and for good reason. Despite offering some of the most competitive plans on the markets the smaller suppliers aren’t really taken seriously by most people, and still command a relatively tiny share of the market, but could things be about to change?
Earlier this week we noted that the small suppliers briefly commanded our best buy table by offering the five cheapest plans for the average dual-fuel user. What’s more, the rise of Co-Operative Energy gives people the chance to support a different business model and get a better deal. Who said size matters?
5. Fixed plan fever
If 2011 was all about fixed plans announcing themselves to the energy world, 2012 saw them stepping into the spotlight. EDF Energy even built a whole campaign around it’s Blue+ Price Promise, and for a while over the summer with the spectre of price rises looming on the horizon fixed plans were the only sensible plan to have.
Then things changed. Like a flock of birds abandoning their nesting sites before disaster struck the best fixed plans started disappearing from the market, leaving those looking to switch having to pay a premium for the insurance of fixed prices.
But all is not lost, despite costing more we still think there are some fixed plans which offer real value, particularly if there are no exit fees.