Coalition bids to break energy giants’ dominance

By politics.co.uk staff

Ed Davey finally moved against the 'big six' energy firms today after months of threats, by forcing a series of regulatory changes designed to break their stranglehold on the sector.

The energy and climate change secretary has given his backing to regulator Ofgem's moves to establish a more level playing field for independent suppliers.

Final proposals outlined today by the watchdog will force the big six – British Gas Centrica, EDF Energy, E.ON, RWE Npower, Scottish Power and SSE – to trade fairly with small suppliers or face financial penalties.

And they will make forward trading in energy clearer by making the biggest energy firms post their prices two years in advance.

"Greater price transparency will assist investors seeking to build new generation plant and help secure supplies for consumers, who are also set to benefit from a simpler, clearer and fairer energy market thanks to our retail market reforms," Ofgem's senior partner for markets Andrew Wright said.

Davey urged companies to work with Ofgem to implement the proposals and warned the government would use the energy bill "should Ofgem's proposals be delayed or frustrated".

"I want our energy market to be as competitive as possible," he said.

"An increased role and level playing field for independent suppliers and generators is precisely what will help drive the competition that delivers better value for consumers and businesses."

The developments were welcomed by Ann Robinson, uSwitch.com's director of policy.

"This is exactly the shot in the arm that the competitive market needs if it is to start working effectively for consumers," she said.

Initial signs suggested the industry was not prepared to fight the government on the changes – but that it could be looking to water them down.

"Effective and transparent wholesale energy markets can deliver benefits for customers, and we understand and agree with the objective of creating a more competitive retail market," Angela Knight of Energy UK said.

"The energy industry agrees with Ofgem that more work needs to be done on these proposals and are keen to have further discussions."