New rules to boost energy market competition
Regulator Ofgem has announced new measures aimed at boosting competition in the energy market.
Under the new rules, the six largest suppliers will have to be more transparent with their accounts to make it easier for new firms to enter the market.
From 31 March, the ‘big six’ firms – including British Gas and npower – must publish wholesale power prices up to two years in advance, which will provide smaller suppliers with the opportunity to trade and compete more effectively.
The regulator said the ‘big six’ will have to trade fairly with independent suppliers, or face financial penalties.
Ofgem CEO Andrew Wright said: “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.”
Ann Robinson, director of consumer policy at uSwitch.com, said the new measures were a step in the right direction for improving competition and transparency for consumers.
She said: “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.
“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.”