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Huhne moves to improve UK energy market competitiveness

12 July 2011

Secretary of state, Chris Huhne told small energy suppliers that ‘we need more companies and more competition to keep price rises as low as possible’. On July 7 energy suppliers, including Ecotricity, Co-op Energy, First Utility, Good Energy, Ovo Energy, and Utilita, attended a summit with Chris Huhne, energy minister Charles Hendry, and Ofgem chief executive Alistair Buchanan.

The meeting was an opportunity for suppliers to explain what they regard as the barriers to entry and growth within the energy market, to suggest solutions, and to explore issues such as wholesale liquidity in the electricity market, the impact of government environmental and social programmes, and market complexity. Speaking after the event, energy secretary Chris Huhne said:

“I have found this a very useful discussion indeed, hearing directly from the people at the front line of breaking into the energy market about the challenges they face and what is needed to help bring barriers down for new entrants. I intend to continue this dialogue with small suppliers and to hold regular summits with them to review progress on boosting competition.

“Our discussion has reinforced my view that we need more companies and more competition to keep price rises as low as possible, and that both the Government and regulator, Ofgem, must work to boost transparency in billing so that customers can shop around for the best deal more easily because that drives competition. And we in government need to think carefully about designing the obligations we place on companies to improve energy efficiency and provide help to vulnerable consumers, so they do not hamper small suppliers’ ability to compete with the bigger players.

“We know rising energy prices are hitting many households hard at a difficult time. Price increases are mainly driven by international factors, with increased demands for fossil fuels pushing up prices. Next week I will be setting out our plans for biggest reform of the electricity market in a generation, that will reduce our dependence on fossil fuels in the long term and make sure we can keep the lights on.

“But householders can also control their bills by shopping around for the best energy deal in the market and by taking energy efficiency measures such as loft and cavity wall insulation – which the Government requires the big energy suppliers to help households with and provide free to some of the most vulnerable consumers. We will also be rolling out the Green Deal next year, to help even more households save money through a greater range of energy efficiency measures.”

The summit came days before the Government is due to publish its White Paper on electricity market reform, which will promote competition and set out the biggest shake-up of the electricity market in a generation to deliver the gigantic £110bn+ investment needed over the next ten years to upgrade the UK’s electricity system and keep the lights on.

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