Energy firms with 250,000 customers or fewer will benefit from a cut in red tape, Charles Hendry announced today.
The smaller gas and electricity suppliers will not have to take part in two government programmes- the Carbon Emissions Reduction Target and the Community Energy Saving Programme.
Previously suppliers with as few as 50,000 customers were obliged to participate. Small suppliers participating in the schemes had reduced incentives to grow.
Mr Hendry said: “Currently, over 99% of people get their energy from just six big companies. Reducing red tape for smaller suppliers will help them grow and encourage new players into the market. Increased competition can help bring down prices and encourage innovation, benefitting energy consumers.
The Carbon Emissions Reduction Target requires domestic energy suppliers to make savings in the amount of CO2 emitted by householders. Suppliers meet this target by promoting the uptake of low carbon energy solutions to household energy consumers, thereby assisting them to reduce the carbon footprint of their homes.