The regulator has given industry players including suppliers & consumer protection bodies until 11 June to comment on its proposals to re-introduce so-called ‘acquisition-only tariffs’.

The consultation follows Ofgem’s  recent measures taken to protect consumers – including via a series of rising or falling caps guiding retail tariffs – from rampaging inflation in energy prices. These have been caused by the world’s emergence from Covid lockdowns, and by the neo-fascist Putin’s rapacious aggression since 2022 towards Ukraine.

So-called ‘acquisition-only’ tariffs, available only to new accounts and not to existing customers, have been banned by Ofgem since April 2022, in an effort to stabilise prices in unstable, post-Covid markets. The ban was first extended until March last year, and then until March 2024.

At the end of February, Ofgem announced it would use its existing powers to extend the ban for a further thirteen months, hinting the latest extension would be the last. At the same time, the regulator said it would sound out industry opinion on whether to remove the ban as early as this October, assuming its retail price caps remain in force.  The alternative is to leave the ban in place until March next year.

Permitting suppliers to re-launch aggressive customer-recruiting tariffs this autumn, is flagged in the consultation as Ofgem’s preference.  An early lift will yield, the body expects will a faster return to competition between suppliers on both price and service factors,

The proposals set out Ofgem’s evaluations of each scenario’s impact on efficient competition in retail energy.

Early response from participants included an argument for retention from Citizens’ Advice, the government’s statutory and independent advisor on fuel poverty.

“Keeping the ban in place is a no-brainer“, Gillian Cooper, CA’s energy director commented.  “It prevents suppliers from locking loyal customers out of their cheapest deals.

“Ofgem must resist pressure to scrap it and ensure suppliers are proactively keeping customers up to date about their cheapest deals.

Removing the ban would unfairly hit older and disabled consumers the hardest, said the CA spokesperson, as they are less likely to switch to a new supplier.

“The ban also protects millions of people with energy debt, whose suppliers can block them from switching, as it means they don’t have to stay on the most expensive tariffs pushing them even further into the red.

At Britain’s biggest supplier Octopus Energy, director of regulation Rachel Fletcher agreed.

 “Allowing suppliers to block their best deals from loyal customers would be a return to the ‘Wild West’ of the energy industry”, she said.

“The loyalty penalty was a key reason 30 energy companies went bust, and ended up adding billions of pounds on to energy bills. Ofgem was right to ban these unsustainable Del Boy tactics, and it would be crazy to bring them back now”, Fletcher went on.

“Instead we need a more transparent, fairer market where suppliers are forced to compete based on innovation, customer service and efficiency. We need lower prices for everyone, not just the few.”

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Reinforcing the price-cutting truth of accelerated renewables deployment, the think tank reports canny Teuton customers cashing in.  Those who switched suppliers collected cuts in the nation’s Putin-pushed, generally high tariffs.

Although the sun shone less in Germany in 2023, solar farms and roofs produced 61 TWh,  one TWh up on the previous year.

That strong expansion in solar PV capacity keeps Germany up to pace for targeted carbon emissions by 2030, the pro-green consultancy report.

Wind, beating gas for the first time as Germany’s single biggest power source, also set new records in Europe’s biggest national power market, around a third bigger than Britain’s.  Consistent breezes spun German turbines, overwhelmingly land-based, to produce 138 TWh, beating 132 TWh from the nation’s coal-fired plants.

With only 2.9 GW of new turbines added, though, Agora’s analysts complain wind expansion last year ran at half what Germany needs.  2024 promises better, they believe, adding that a current 7.7GW pipeline of unbuilt but permitted wind farms are the minimum the country needs.

Germany also benefitted from strong renewables and nuclear generation across Europe’s integrated grids. It imported 69 TWh of largely low carbon power, half of it from neighbours’ wind and hydro plants, plus 24 percent from French, Polish and Belgian nuclear stations.  At the same time it sold 58 TWh of home-produced electricity abroad.

Across the EU, Agora calculates that renewable energy production increased by 5 percent last year.

Total carbon emissions from German energy industries, including refineries and district heating on top of power generation, amounted to 210 million tonnes of CO₂, a drop of 18 percent on 2022’s planet heating.

German generators’ shunning of Russian gas underpins the nation’s extraordinary 3.9% drop in electricity consumption last year. Mothballing of coal-fired plants cut 15 m tonnes of emissions. Easing back output from lignite facilities added 29 million more.

Astonishingly, some power and gas tariffs also fell, the consultancy reports, particularly for firms and households who switched suppliers.

“Prices for existing customers remained high, as electricity providers generally delay passing the fall in prices on the electricity exchange to customers“, the report notes. “Natural gas prices also fell in 2023 but remained above pre-crisis levels“.

“The price of electricity is more strongly affected by levies and surcharges than the prices of fossil fuels such as oil and gas. This is slowing the switch by households to climate-friendly technologies such as electric cars or heat pumps,” Agoraenergiewende director Simon Müller cautioned.

Despite German renewables’ record-breaking, Müller says gaps remain in national energy policy.

“2023 was a two-speed year,” he said. “The energy sector notched up a climate policy success with its record level of new renewable power, taking us closer to the 2030 target,”

“But we don’t consider the emissions reductions from industry to be sustainable. The drop in production due to the energy crisis weakens Germany’s industrial base. If emissions are simply shifted abroad as a result, this won’t benefit the climate. The buildings and transport sectors are also lagging as far as structural climate protection measures are concerned.”

Read AgoraEnergiewende’s summary and further analysis in English here.

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Deceptive or downright dishonest practices rife among Britain’s tariff advisors include, or so the survey found:

• locking businesses into expensive supply contracts
• concealing commission
• cold calling with aggressive sales tactics
• brokers falsely representing themselves as energy suppliers

The sector’s catalogue of near-criminality is laid out in Octopus’ new report, “Small businesses in the dark: Energy brokers and the hidden scandal in energy prices”.  Its conclusions rest on the opinions of 1,000 firms reporting, each of them employing fewer than 50 staff.

As solutions to rooting out exploitation of often outwitted small corporates, Octopus urges government to impose more disclosure of commissions received by advisors from power companies, a cap on their value, and an end to cold calls.  Octopus’ remedies amount to a call for Britain’s spiralling proliferation of brokers to meet adequate regulation for the first time.

Small firms questioned by the study’s researchers backed the changes, when questioned in June. Nearly eight in ten, or 78%, told Octopus’ pollsters that brokers’ commissions should be disclosed in detail and in writing, and before customers put ink on any contract.

At 70%, only slightly fewer wealth creators want a cap on intermediaries’ commissions.

Octopus Energy for Business retails 100% renewable electricity & gas to 60,000 SMEs.  The supplier is calling for immediate action to protect small businesses’ interests.

It points out that, even as D-ESNZ and Ofgem are currently looking into suppliers’ working relationships with brokers, brokers themselves remain free of direct accountabilty to any regulator.  Few, if any, advisors are licenced by Ofgem as an energy supplier.

Octopus Energy for Business’ CEO Zoisa North-Bond said: “The pandemic, inflation and the cost of living crisis have increased pressures on small businesses to colossal levels.

“It’s simply not right that some energy brokers have been capitalising on this. The business energy market has become the Wild West, and bad broker behaviour is running rampant.

“It’s fundamental we raise awareness of these damaging practices”, the Octopus chief went on ”and there are things that can be done now to drastically improve transparency in the market. We need to stand up for small businesses to help drive down bills – and we need to get moving today.”

Read the Octopus report here.

The post Broke, and broker: 3 million SMEs suffer in contact with tariff intermediaries, Octopus poll finds appeared first on theenergyst.com.

The Federation of Small Businesses & the British Chamber of Commerce independently allege that price gouging last summer by suppliers and their brokers has left family firms and small traders tied into excessive deals.

The resulting plight afflicting as many as 1 million SMEs amounts to Britain’s “greatest mis-selling scandal since PPI”, a third trade group has reportedly alleged in its letter to energy secretary Grant Shapps.

The groups say their polling indicates many member enterprises were left hooked on expensive deals, imposed last year as prices to commercial customers soared as much as fourfold in the aftermath of Russia’s Ukraine invasion.

At the time, say the groups, the effects on wholesale power prices of Putin’s aggression left small firms struggling to find suppliers. Many either refused outright to supply small businesses or else demanded hefty signing on fees upfront.

Now the Federation of Small Business is calling on energy ministry D-ESNZ to allow small traders to renegotiate fixed deals struck when prices peaked last summer.

After six months of support delivered by its Energy Bill Discount Scheme, two weeks ago the government drastically cut help for firms still facing unprecedented heat and power costs.  Though extended until next March, its new levels offer less generous compensation.

The Federation of Small Businesses wrote last month to ministers and to Ofgem, seeking their approval to free up firms wanting to re-open talks with suppliers and their agents. “Blending and extending” contracts is among solutions promposed by the advocates, enabling members to leave dear fixed deals, and opt instead for today’s partial recovery of normality.

“Small firms that fixed their energy contracts last year will see their bills rise by three or even four-fold as prices revert back to high prices and to pre-Energy Bill Relief Scheme levels”, FSB policy director Tina McKenzie wrote this month on the group’s blog.

“We found that 24% of small firms are trapped in fixed contracts, and of them, 28% say they could be forced to downsize, close or restructuring their businesses,”, McKenzie warned. “This equates to 370,000 small businesses, and not to mention the jobs and communities which depend upon them.

“Let’s not forget these small businesses are the ones that pushed through Covid and the energy crisis in winter despite their very limited resources. These firms deserve a fighting chance this year”, she wrote to FSB members.

As reported in today’s Guardian, the Confederation of British Metalformers has told Shapps expensive price commitments snagging up to 1 million firms is Britain’s “biggest mis-selling scandal since PPI”.

Quoted by the newspaper, CBM president Stephen Morley tells the energy secretary that small manufacturers face a “perilous situation”, threatening “another nail in the coffin of the British manufacturing sector”.  Morley alleges that energy suppliers and brokers make “huge profits at the expense of UK competitiveness”.

Ofgem reportedly wrote last month to chancellor Jeremy Hunt, telling him that companies were facing energy bills which are “higher than is explained by market conditions”.  The regulator says it has learned of steeply increased deposits sought by suppliers to guarantee commercial supply, including dearer standing charges.

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Since the start of winter, the default tariff cap, or price cap, and the Energy Price Guarantee (EPG) have left the government-supported Standard Variable Tariff (SVT) lower than almost all energy tariffs.

That circumstance imposes a chokehold on the savings which households can make by switching, Cornwall Insight’s Kate Mulvany observes in a research note.

Monthly account moves between suppliers have collapsed as a result, from just under half a million every month in 2019, to only 85,000 last year.

In April, government support for domestic through the EPG bills rises to £3,000.

With wholesale fossil feedstock prices paid by generators now shrunk to or below levels seen before Putin’s invasion of Ukraine twelve months ago, it’s on the cards, says Cornwall, that suppliers will soon offer fixed tariffs attractively competitive against the government-capped price scales.

Although increased market competition naturally depends on stable wholesale markets, Cornwall sees early indications that suppliers could launch more competitively priced tariffs within weeks.

“Current market conditions suggest there may be room for households to have a wider engagement in the energy market than they have in recent times”, says the note.

“There are many variables still in play, and it is difficult to know how fast and how far energy bills will fall”, Mulvany cautions.

“The Market Stabilisation charge adds another level of complexity, as while it may safeguard against supplier collapse it is likely to drive up the cost of energy deals offered by suppliers”, she perceives.

“If suppliers’ costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans, with millions of households finally able to take advantage of the savings they have been missing out on for years.

Bill-payers scared or intimidated into inertia by recent tariff turmoil will also influence market outcomes, Cornwall believes.

“To see rising switching we are also relying on consumers engaging with an energy market which many are understandably wary of. It is possible some households may choose to stick with what they know instead of choosing cheaper options.”

More on Cornwall’s Insight here.

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Customers moving to the supplier’s smart export offering will receive payment for the full amount of electricity they export, rather than a “deemed” 50% of what they generate, the FiT scheme’s rule-of-thumb estimate of unwanted power flows exported by homeowners.

The Chippenham-based power provider reckons its new service makes payments fairer & simpler, providing for the first time accurate rewards for unused home-produced power, which remains usable by third parties.

The deal applies to solar PV owners and microgenerators using wind turbines.

Good Energy has long term power purchase agreements (PPAs) with over 1,700 independent UK generators, many benefitting from the FiT.  It successfully piloted its SET offering in December 2022, and plans to ramp it towards 80,000 qualifying customers this year.

To benefit, homes will need either a second generation smart meter, or a first generation device if enrolled with the Data Communications Company, the Capita offshoot which supervises the nation’s digital billing switchover.

Good Energy recently launched a new online product for FiT generators to switch to.  The Feed-in Tariff scheme was introduced in 2010 based – according to Good Energy – on a blueprint of the firm’s own HomeGen tariff.  The state-backed FiT closed to new applicants in March 2019.

Since then, export tariffs offered by retailers have chiefly dawdled around an unexciting 5 pence per kWh, the supposed guide price offered in legislation that terminated FiT entry after nine years.

Rival supplier Octopus last month shook up the slumbering SET market, backing its dramatic launch into home PV installation with its own fast-changing Agile Outgoing tariff.  By tracking wholesale and day-ahead markets, the Octopus offering has reached over £1.00 per kWh exported.

Good Energy says it will soon introduce its own rival “market-leading” homes-oriented export tariff.  Like Octopus, the West Country-based rival is now venturing into direct on-roof installations of home solar kit, following its purchase in December of PV installer Igloo Works.

 The supplier’s CEO Nigel Pocklington said: “Good Energy has long been a pioneer in supporting small scale clean energy generation. This launch continues that tradition of innovation”.

More information here.

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