Ofgem: Energy customers may save up to £260 without switching

Energy market regulator Ofgem has claimed that millions of UK customers could save hundreds of pounds per year on their energy bills, without the need to switch supplier.

Figures from Ofgem indicate that more than 1.7 million Npower customers could save as much as £261 a year by moving to another Npower tariff.  Npower have stated that customers are unlikely to be able to save £261, as fixed-price deals are typically limited to a certain number of customers.

Nearly 6.6 million customers of British Gas may save £129 per year, although British Gas has argued that it has changed its prices so the saving is now £43 a year. The Ofgem figures demonstrate that almost all of SSE customers are on the most expensive form of tariff, with 91% of customers on standard variable tariffs, in contrast to just 9% at First Utility. In the UK in total, standard tariff contracts represent 66% of households.

Supplier % of Customers on Standard Variable Tariffs (SVTs) Difference between SVT and cheapest deal
British Gas 74% £129 (now £43)
Co-operative Energy 42% £245
EDF 56% £136
E.On. 73% £41
Extra Energy 14% £154
First Utility 9% £157
Npower 59% £261
Ovo 35% £67
Scottish Power 50% £129
SSE 91% £98

 

In November, the business and energy secretary, Greg Clark, met with various energy suppliers, following claims that some suppliers were making large profits as a results of customers who are on standard variable tariffs. The industry denied profiteering, but continues to come under pressure to reduce its prices for standard tariffs. Three of the biggest suppliers have subsequently frozen their tariffs through the winter as a result. Despite this Ofgem chose to publish its comparison table to highlight the widespread difference between the cheapest and most expensive tariffs.

Source: BBC

Drax set to acquire Opus Energy

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Power station owner Drax is set to purchase energy supplier Opus Energy in a £340m deal as part of the company’s strategy overhaul. Drax currently runs the largest power station in the UK in Selby, has stated that the acquisition of Opus Energy will create Britain’s fifth biggest non-domestic energy retailer. Currently Opus Energy provides the highest proportion of electricity and gas supply to businesses outside of the “Big Six” energy firms.

The company also announced a £18.5m purchase of four gas turbine projects that will have a total capacity of 1,200MW as Drax looks to move away from coal fired power generation. Drax is keen to switch from coal burning with the government enforcing a shutdown of coal plants by 2025, therefore explaining the move towards direct energy supply and backup power. Half of the plant has already been converted to run on biomass, although the government is not supporting the conversion of the remaining coal units. CEO of the Drax Group Dorothy Thompson said: “These initiatives mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term, financial performance through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate.”

Shares in Drax rose by 20% when the deal was announced on Tuesday, although warned that 2016 underlying earnings would be towards the bottom end of forecasts.

Source: BBC