Ofgem cracks whip on Big Six to boost competition

The UK’s largest energy firms will have to trade “fairly” with independent suppliers or face financial penalties, regulator Ofgem said today. The rule for the six biggest energy suppliers and […]

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By Vicky Ellis

The UK’s largest energy firms will have to trade “fairly” with independent suppliers or face financial penalties, regulator Ofgem said today.

The rule for the six biggest energy suppliers and two largest power generators will kick in from 31 March.

The Big Six suppliers will also have to publish the price at which they will trade wholesale power up to two years in advance.

These prices must be published daily in two one-hour windows. Ofgem said this will give smaller suppliers the opportunity and products they need to trade and compete effectively.

Ofgem CEO Andrew Wright said: “These reforms give independent suppliers, generators and new entrants to the market, both the visibility of prices and opportunities to trade that they need to compete with the largest energy suppliers.

“Almost two million customers are with independent suppliers and we expect these reforms to help these suppliers and any new entrants to grow.”

The regulator is pressuring the Big Six to make their annual statements a more “useful and accessible picture of company profits”.

Mr Wright said: “We also want to ensure that information on revenues, costs and profits of the largest energy suppliers is as clear as possible for consumers.”

Secretary of State for Energy and Climate Change Edward Davey described the move as a “toughening up of competition”.

He said: “By making these wholesale prices more transparent, it will help reveal how the Big Six energy companies are trading and make it easier for new competition to challenge their business model.”