The energy market in the UK is under great strain at the moment, and we have seen a massive change in the way that it is made up over the past couple of years.
We have seen many energy companies go under in the past couple of years, which is due to a number of different reasons that have caused instability in the market.
Energy Suppliers in the UK
The number of energy suppliers in the UK has fallen significantly in recent years. This is because the deregulated market has made the supply of energy highly competitive, with businesses competing against each other and providing energy at a (relatively) low cost.
These small energy companies were staying reasonably successful until a crisis hit. When the wholesale energy prices rose significantly, it meant that the energy companies that were charging low rates and tariffs could not support themselves on the prices that they were charging, and this meant that they went under.
The customers from the small energy suppliers then ended up being passed on to bigger energy suppliers who were able to support themselves. These are mostly the ‘Big 6’:
• British Gas
• Scottish Power
• EDF Energy
• SSE (Swalec, Scottish Hydro, Southern Electric, and Atlantic)
At the moment, there are 37 energy suppliers remaining in the UK – with about 62 of them having gone under.
Energy Price Cap
One of the biggest issues for consumers at the moment is the price of energy. As bills go up and are set to rise drastically over the next few months, the main reason for this is due to the rise of the energy price cap.
The energy price cap is the maximum amount of money that you can be charged for your energy. It is set by Ofgem – the regulatory body for the energy companies and is based on the cost of energy that suppliers pay for it. The price cap is reviewed every three months.
There are many reasons why the prices have got up so significantly and the main ones are due to the post-covid surge in demand and the war in Ukraine.
Keeping your Energy Bills Down
With the threat of a cost of living crisis and extortionate energy bills, this is a worrying time for domestic customers and businesses alike. Although we are all hoping that the government provides more support for energy bills, there are also some things that you can do yourself to help to keep your energy bills as low as possible.
Essentially, these are to reduce the energy that you are using, reduce the energy that you are wasting, and generate as much of your own energy as you can.
With this in mind, here are some tips on how you can keep your energy bills as low as possible:
• Get an EPC – An EPC (Energy Performance Certificate) will not in itself lower your bills. It will, however, give you a good idea about how energy efficient your property is, as well as a list of recommendations as to how to make it more energy efficient.
• Insulation – Wall and loft insulation are a great way to reduce the amount of heat that is escaping from your home. They may have an initial cost, but you should get your money back in a short amount of time.
• Low-energy appliances – Appliances such as refrigerators and washing machines can use high levels of energy. When you buy an appliance, it should be given an energy rating (in a similar way to an EPC) that will indicate how energy efficient it is. You can then make an informed decision about which appliance you buy.
• Solar panels – Solar panels are an excellent way to generate some of your own energy. They convert the light from the sun into electricity that can then be used in the home. In addition to helping in your home, the energy produced can also be sold back to the grid, gaining you some extra income.
• Get a smart meter – A smart meter is fitted by your energy company and can be used to give you real-time information about your energy consumption. Again, a smart meter in itself will not lower your energy bills, but it will give you a better and more detailed understanding of your energy use, and then enable you to make conscious decisions about how to use your energy most efficiently.
The cost of energy is rising and is set to rise significantly still. At the moment, there is not much that we can do as individuals or businesses to reduce these spiralling energy bills, but by implementing some of the measures above, you can reduce the amount of energy that you are using and wasting in your property.