Tomorrows Energy Bill has 3 key elements:
• It Limits energy companies to providing four core tariffs per fuel to end the proliferation of tariffs that has taken place over the last few years. We will require suppliers to have one standard variable rate tariff, and one fixed term fixed price tariff. This will ensure that these two tariff types, which account for 85 per cent of all customers, are clear, simple and easy to compare across suppliers.
• It Requires suppliers to switch customers to the cheaper tariffs. We will also use the Bill to require energy suppliers to switch their customers who are on expensive ‘dead’ tariffs (old tariffs that are more expensive than current deals) to the supplier’s cheapest tariff which suits them.
• It Provides for simpler bills. We will also use the Bill to make suppliers provide estimates of savings that could be made by moving to the cheapest tariff on customer’s bills. This will include the cheapest tariff for the customer’s current payment method, and the cheapest tariff provided by the supplier overall.
The Bill's effect on UK Energy supply will be massive:
- We are also reforming Britain’s electricity market
- There are new support measures for generators of low carbon power.
- There is a capacity marke to guarantee that the UK does not suffer from power outages if there are times when low carbon electricity providers are not able to meet the country’s needs.
- There is an Emissions Performance Standard (EPS) to promote carbon capture technology.
The Government will introduce a limit on how much carbon a power station can give off so investors are encouraged to back carbon capture and storage (CCS) technologies. Fully developed CCS will allow fossil fuel power stations to continue operating by capturing the carbon dioxide they produce to stop it entering the atmosphere.
And there will be new requirements for Ofgem to boost consumer protection. The Bill will include a new Strategy and Policy Statement for Ofgem that will set new five year objectives for Ofgem on protecting consumers and require them to report on them regularly. Ofgem will report every year on how they are doing on enforcing greater transparency and accountability in the energy market.
What is wonderful is that this reform is long overdue. I am really pleased we are grasping the problem and making the case for reform. If you do not think that reform is needed please take on board a few stats.
• Gas and electricity bills more than doubled under the previous government. Between 1997 and 2010, the average domestic gas bill (standard credit) went up by 108 per cent, from £328 to £681. Electricity bills went up by 53 per cent, from £285 to £435
• Fuel poverty rose by 2.8 million households in Labour’s last five years. There were 4 million households living in fuel poverty in England in 2009, up from 1.2 million in 2004