Underhand tactics in energy pricing and selling: revealed

The Energy Brokers is strongly advising businesses to clarify key points when choosing an energy supply partner.

With many cases of abuse reported each year in the energy broker sector, we believe that buyers need to be fully aware of the total fee being paid from an energy supplier to the broker. Indeed, we recommend that you assess all offers that you receive from potential suppliers on a level basis in this regard.

With the mandatory Code of Practice now shelved, Third Party Intermediaries are not subject to direct sectoral regulation in the same way as energy suppliers. We are therefore advising our business users to be aware of poor practices that could mean they end up paying more than they should for electricity and gas, or be locked-in to unfavourable terms for a long time.

With this in mind, we have published our Executive Briefing Paper “Openness and Transparency in Energy Pricing and Purchasing”. This free discussion paper explains why buyers should be wary, reveals some of the dodgy tactics used, discusses the need for greater clarity – and suggests key questions you should ask any potential partner.

Download your copy here.

As an early mover in the deregulated UK energy market, The Energy Brokers Limited has developed an industry reputation for openness, transparency, market intelligence and ethical working practices.

Our approach has resulted in a high level of client retention – greater than 97% – and to all energy suppliers noting that our fees are among the best value in the industry. Where our business has lost customers in the past based on price, subsequent investigations have revealed evidence of bad practices, which can be extremely difficult for energy users and consumers to identify in advance. This, we believe, is due to a lack of openness and transparency on behalf of some TPIs and unfortunately across the energy buying sector in general.

Source: The Energy Brokers Limited

Chancellor keeps carbon tax fixed until 2020

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Chancellor of the Exchequer Philip Hammond announced during his first Autumn Statement that UK Carbon Price Support rates (CPS) of £18.00/tCO2e would be unchanged until 2020, uprating with inflation during 2020-21.

The move sees no action from the new Chancellor on the carbon price support rates which are currently in the first year of a five year freeze, with a delay in decision on future years. The government stated that it will “continue to consider the appropriate mechanism for determining the carbon price in the 2020s” but provided no further details beyond 2021 in the statement and only reaffirmed previously announced rates which Mr Hammond said would “provide certainty to business”. The delaying of the action on UK carbon tax rates drew criticism from both those supporting the levy and those who want it scrapped.

There had been speculation that the tax would be scrapped by the Chancellor, which is estimated to add £36 per year to household bills which is roughly 7%. Industrial users have criticised the tax and called for its abolition citing that it has made electricity prices uncompetitive due to the increasing gap between the carbon price faced by UK consumers to those abroad as EU ETS carbon prices are substantially lower than was expected when the tax was introduced.

In a statement that was relatively light in energy news, with decisions on the future of the Levy Control Framework into the next decade also deferred until next year’s budget. The government plans to continue to engage with stakeholders in the development of an Emissions Reduction Plan, which is set to be published at the beginning of 2017.

Source: Cornwall Energy

Renewables Obligation for 2017-18 set by Government

wind_turbine_field_5The Department for Business, Energy & Industrial Strategy has confirmed the Renewables Obligation (RO) levels for the 2017-18 compliance period. As part of the Renewables Obligation Order (ROO), the secretary of state must publish the number of renewables obligation certificates (ROCs) that electricity generators are required to produce during an obligation period. The policy paper that was issued on 1 October stated that the overall size of the obligation would be set at 108.2 million ROCs in the UK. This means that the Renewables Obligation, the number of ROCs that electricity suppliers are required to produce during the 2017/18 obligation period, will be 0.409 ROCs per MWh in England, Wales and Scotland, and 0.167 ROCs per MWh in Northern Ireland.

However the government further detailed that it would soon outline how the obligation level will be impacted by the planned exemption for energy intensive industries up to 85% of the indirect costs of the RO. The government begun a consultation on exemption from RO for energy intensive industries (EIIs) in April 2016 whereby plans to introduce savings for EIIs via lower RO rates passed through by their supplier. Further details will be key for these businesses ahead of the proposed change in policy from April 2017.

Source: Department for Business, Energy & Industrial Strategy

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OFGEM proposal to cut National Grid’s RIIO allowance by £185m

Electricity Pylon PhotoA mid period review by OFGEM has led to proposed to reduce the budget for the National Grid’s RIIO-T1 price control framework.  The consultation that was published on 18 August saw regulator OFGEM explain the proposal by stating that since the beginning of the RIIO-T1 price control in 2013, money that had been allocated to National Grid for several uses had required a revision.  OFGEM further proposed to reduce National Grid’s fault level protection allowance by £38.1m and increase its system operator allowance by £21.5m in order to ensure optimal management of additional balancing services.

The RIIO-T1 model (Revenue= Incentives+ Innovation + Outputs) was one of the first price controls to reflect the new model. The RIIO framework is designed to promote smarter gas and electricity networks as part of carbon reduction efforts, with the framework is set to last until 31 March 2021.

OFGEM will collate responses until 6 October, with any proposed changes following OFGEM’s consultation to take effect from 1 April 2018. Full details and the consultation document can be found here.

Source: Cornwall Energy, OFGEM