The UK energy market needs urgent reform, according to a report by the Department for Business, Enterprise and Regulatory Reform. The report will be published today (July 28).
The report follows an investigation that was launched in February after price rises from all the “big six” utility suppliers. It says the UK’s energy markets “are not functioning as efficiently as they should”, which could lead to more price increases for households and the industry.
It says: “Gas and electricity bills for domestic customers will rise significantly in the near future, over and above the increases already announced this year.”
The report warns the rises will have “significant consequences” for millions of households, “especially the fuel poor”.
British Gas, EDF Energy, Npower, E.on, Scottish Power and Scottish and Southern Energy have already hiked their prices this year. Last week, a further round of increases began with EDF Energy announcing that it had raised its gas price by 22% and electricity by 17% last week.
The BERR committee has called for energy regulator Ofgem to investigate “why gas producers seem unwilling to trade in the forward market”.
It adds: “If it is unable to reach firm conclusions or suggest appropriate remedies, it should consider a referral of this aspect of the market to the Competition Commission.”
Ofgem, which is currently carrying out an additional energy supply market “probe”, says it supports BERR’s findings and “will study its recommendations carefully”.