There has been much research into the issue of regulation in the energy market and current thinking is that regulation combined with healthy competition can be more beneficial than competition alone. Consumers have found that their energy bills have dropped substantially in recent years, which is in part thanks to regulation questioning the dominance of the ‘Big Six’ energy suppliers.
The Big Six Suppliers
Experts have suggested that there is not enough competition in the UK energy market. The electricity and gas suppliers available in the UK have been whittled down to just six companies since the retail energy market was opened up in 1998: British Gas, SSE, EDF Energy, Scottish Power, npower and E.ON. These supply 98% of the energy to UK homes.
Ofgem Customer Database
These six companies have recently been given the go-ahead to access an industry-wide database of customers held by industry regulator Ofgem, which may lead to a deluge of junk mail being delivered to homes.
There is some good news concerning the UK energy market, however, including the announcement that the government has introduced a price cap for the four million customers who are on pre-payment meters, along with a tariff cap.
Although people are concerned about junk mail, the customer database access means that rival companies can inform customers about potential savings. This can create more competition, which could help to reduce energy bills. It is thought that thousands of people currently over-pay for their energy.
Although gas and electricity are the most common types of energy, renewable energy sources are becoming more important to the consumer, offering ways to save more money and help the planet. Across Britain and Northern Ireland solar panels are becoming increasingly popular and solar panels in Belfast are in particularly high demand. This interest in renewable energy means there is even more competition in the energy market.
Ofgem launched an enquiry back in 2014 to find out whether the Big Six companies were abusing their monopoly of the market. Now the regulator is looking to push ahead with further regulations to increase competition. Add to this the growth in the renewable energy market and the consumer looks set to enjoy greater savings in the future.