Tag Archives: Energy

Loyal Energy Customers To Pay Fair Price From Now

Around 11 million households who have stayed loyal to energy suppliers on poor value energy tariffs will pay a fair price from today (1 January 2019) thanks to the government’s price cap.

The cap will bring down the amount consumers have been overpaying to energy companies, including the Big Six, by £1 billion a year, starting this winter when households are typically using more energy to heat and light their homes. It will remain in place until at least 2020, while energy suppliers and industry continue to work with the energy regulator Ofgem and the government to build an energy market that works better for all consumers.

Prime Minister Theresa May said:

Our energy price cap will cut bills for millions of families and people across the UK who have been ripped off by energy companies for far too long. From today, money will go straight back into the pockets of loyal consumers, including the elderly and those on lower incomes who feel the pinch more acutely.

But work to tackle this issue doesn’t stop there. We’re working with regulators and industry to ensure that consumers are not unfairly overcharged in the future – whether on their phone bills or their insurance premiums.

Energy and Clean Growth Minister Claire Perry said:

Today marks the end of unjustified price rises on energy bills as this government delivers on time on its promise to protect millions of households from poor value deals, especially the vulnerable.

For too long, suppliers have failed to pass on any savings to their customers, who deserve to pay a fair price for their gas and electricity. Switching supplier is still the best way to find a better deal, but that doesn’t mean customers should be punished for their loyalty.

Bill payers can now be confident that any change to the price cap will be a fair representation of the actual costs of energy, rather than suppliers passing on inefficiencies to their customers or as excess profits.

Following a consultation, Ofgem set the price cap level at £1,137 per year for a typical dual fuel customer paying by direct debit. The amount customers will pay depends on how much energy they actually use, as the price cap sets a limit on how much suppliers can charge per unit of gas and electricity not on overall energy bills.

The cap will also protect around one million households who receive the Warm Home Discount currently protected by Ofgem’s safeguard tariff. Ofgem already caps energy prices through its safeguard tariff for 4 million households on pre-payment meters.

Ofgem will review the level of the cap every 6 months taking into account any changes to the actual costs of providing gas and electricity to energy customers. The first review will take place in early February coming into effect on 1 April 2019.

Dermot Nolan, chief executive at Ofgem, said:

Under the cap, Ofgem will protect consumers from being overcharged and ensure they pay a fair price to heat and light their homes. Consumers can have confidence that any rise in prices in the future will only be down to genuine increases in energy costs rather than supplier profiteering while falls in energy costs will always be passed on to them.

Households who are protected by the cap will be able to save even more money by shopping around for a better deal. In the meantime Ofgem will continue with reforms which aim to deliver a smarter, more competitive energy market which, combined with protection for those who need it, works for all consumers.

The Domestic Gas and Electricity Act, which passed Parliamentary scrutiny and became law on 19 July 2018, put in place a requirement on Ofgem to cap standard variable and default energy tariffs after the Competition and Markets Authority (CMA) found consumers had been overpaying the Big Six an average of £1.4 billion a year.

While the temporary cap is in place, energy suppliers and industry will continue to work with Ofgem and government to build an energy market that works better for all consumers, ensuring they get the best service for a fair price so that everyone reaps the benefits of the move to a smarter, more digital economy.

Other measures designed to deliver the government’s objective of clean, affordable and innovative energy, while tackling fuel poverty, as part of our modern Industrial Strategy include:

  • the rollout of smart meters
  • initiatives to promote smarter and faster switching
  • a joint review with Ofgem on the future of the retail market

 

 

Energy Systems Of The Future – Local Communities To Benefit Sooner

Just under £10 million Industrial Strategy Challenge Fund investment will support even more people to get value from smart local energy systems.

A new research consortium and funding for business-led innovation projects will speed up the uptake of smart energy systems by local communities to start benefiting from cleaner, cheaper and more consumer-friendly energy.

Funding is by UK Research and Innovation through the Industrial Strategy Challenge Fund for clean energy – a £102.5 million investment in UK industry and research to develop systems that support the global move to renewables.

Rolled out by 2020s

Twelve projects from all across the UK will share £1.5 million to design ground-breaking, local, smart energy systems that are ready for roll out in the 2020s.

They will quickly bring forward energy systems with improved efficiency and productivity, at lower costs, in order to reduce energy bills for consumers and create better user experiences.

Ultimately this should help improve air quality in line with the government’s fifth carbon budget, at the same time as building the UK’s energy supply chain, creating high value jobs and export opportunities.

Projects include:

  • creating an energy marketplace and local trading platform between the predominantly commercial premises in London South Bank and Waterloo, using IoT sensors, predictive algorithms and storage systems
  • maximising existing and planned renewable generation assets in Bridgend, including solar farms and a nearby energy park, to develop a local electricity flexibility market, an electric vehicle charging network and improved service offerings for transport and heat
  • making use of an established energy innovation district group and new digital technologies, such as sensing and control devices, data analytics and artificial intelligence, the Cheshire Energy Hub will better manage energy use by industrial users, decarbonise and lower costs

Developing novel research concepts

To bring forward novel research in local energy systems and accelerate uptake, value and impact, £8 million will go to setting up EnergyREV, an energy revolution research consortium.

The consortium will be led by the University of Strathclyde and include 29 investigators across 22 universities, working to ensure that UK academic expertise delivers impact and a competitive advantage.

It will work closely with the Energy Systems Catapult to provide analysis, evaluation and assessment of the projects funded under the prospering from the energy revolution challenge.

Additionally, EnergyREV will deliver its own strategic research projects that address some of the industrial challenges in developing local, investable, consumer-centred energy approaches.

Improving uptake, value and impact

Professor Stephen McArthur, Deputy Associate Principal for Research, Knowledge Exchange and Innovation, at the University of Strathclyde said:

EnergyREV is excited about its role in supporting innovation in the prospering from the energy revolution programme.

The world-class knowledge, research teams and interdisciplinary expertise available through our university partnership will improve the uptake, value and impact of smart local energy systems.

We are focused on using our novel research to accelerate and help deliver the Industrial Strategy goals and enhance UK competitiveness.

Rob Saunders, Deputy Challenge Director, Prospering from the Energy Revolution, UK Research and Innovation said:

This is an exciting time for energy innovations.

We all rely on energy and we all need it to be cleaner and more cheaper, both as consumers and as a nation. New technologies point towards a new energy future, one of lower carbon and more efficient energy supply, distribution and storage, giving consumers more control.

This energy revolution – a crucial part of the Industrial Strategy – has the potential to unlock investment and create high-quality jobs and grow companies capable of exporting.

 

New Energy Reforms Come Into Force

Homes across Great Britain will get extra support to make their homes cheaper and easier to keep warm thanks to new government reforms.

  • energy suppliers to focus help on vulnerable households
  • part of plan to improve energy efficiency of 1 million homes by 2020

Homes across Great Britain will get extra support to make their homes cheaper and easier to keep warm thanks to government reforms that have come into forcce on 1 April 2017.

Changes to the Energy Company Obligation (ECO) will make sure energy companies give support to people struggling to meet their heating bills, with plans to extend the scheme from April 2017 to September 2018 also confirmed.

Consumer Minister, Margot James said:

The big energy firms already have to help households save gas and electricity bills, by improving homes so they are easier and cheaper to keep warm.

We’re strengthening this obligation today and making sure they prioritise low income households as part of our plan to insulate 1 million homes by 2020.

The reforms, which were consulted on last year, will simplify the scheme, with energy companies required to provide struggling households with energy efficiency measures to make their homes warmer and bring their bills down.

As well as an increased focus on low income and vulnerable homes, eligibility will be extended to social housing tenants in Energy Performance Certificate (EPC) bands E, F and G, and local authorities will also be able to help match people with energy suppliers.

Suppliers will also be required to install a minimum 21,000 solid wall insulations per year, up from the earlier proposal of 17,000.

There will be continuing protection for the delivery of energy efficiency measures in rural areas, with a requirement that 15% of suppliers’ Carbon Emissions Reduction Obligation be delivered in these areas.

ECO has proved a very effective delivery mechanism with around 2.2 million measures installed in around 1.7 million properties between 2013 and the end of January 2017.

The energy companies obligated are:

  • British Gas
  • The Co-operative
  • EDF Energy
  • EON Energy
  • First Utility
  • npower
  • OVO Energy
  • Scottish power
  • SSE
  • Utilita
  • Utility Warehouse
  • Extra Energy
  • Spark Energy
  • Flow Energy
  • Economy Energy

Where Does The UK Get Its Energy From ?

The UK is consuming less energy than it did in 1998 and more of the energy we are consuming is coming from renewable sources.

However, at the same time, the decline in North Sea oil and gas production has meant the UK has become increasingly dependent on imports of energy.

But just how dependent are we? How do we compare to our European neighbours? And what are we importing and where is it coming from?

UK energy: consumption down and renewable energy up

There was a 17% fall in the amount of energy used by the UK between 1998 and 2015.

This may be explained by:

  • the increased use of energy-efficient technologies by households and firms
  • government policies designed to reduce energy consumption
  • a decline of UK manufacturing, especially in energy-intensive industries

Reliance on imported energy rises back up to 1970 levels

Despite the overall fall in UK energy consumption and the increasing use of renewable and waste sources, the UK’s reliance on imported energy has returned to the levels last seen around the mid-to late-1970s.

In recent years our reliance on imported energy has been on an upward trend but it has now fallen from its recent peak in 2013.

All EU countries now import more energy than they export

All EU countries imported more energy than they exported in 2014. In terms of rankings, of the 28 EU countries the UK was the 12th most dependent on foreign sources of energy; less reliant than Germany and Italy but more reliant than Sweden and the Netherlands.

Furthermore, in 2014 the UK’s import dependency was below the EU average and the UK was the least dependent on foreign sources of energy out of the five EU countries who consumed the largest amounts of energy overall (namely Germany, France, Italy, Spain and the UK).

However, even though the UK’s reliance on imported energy is still below its EU neighbours, the UK is now more in line with them than it has been in recent history.

Since 1998 the UK has gone from being a net exporter to a net importer of energy while Germany, Spain, France and Italy have all consistently imported more energy than they exported.

From oil and natural gas from Norway to coal and diesel from Russia – just where do our energy imports come from?

In 2015 the UK’s main types of imported fuel were crude oil, natural gas and petroleum products (for example, petrol and diesel). We also imported electricity and coal and other types of solid fuel (like wood) in smaller amounts.

Electricity imports

It might seem strange but the UK does actually import electricity that is created elsewhere. Imports of electricity made up 1% of our fuel imports in 2015.

This electricity is imported via interconnectors and it comes mainly from France and the Netherlands.

Information via gov.uk

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