Comment: Bigger changes needed to fix our broken energy system

The Big Six energy providers are netting huge profits while thousands of consumers are living in fuel poverty. Why is the coalition letting them profit at the expense of customers?

By Donna Hume

This week’s emergency summit between government, consumer groups, energy companies and the industry regulator Ofgem barely scratched the surface of the kind of change needed to cut fuel bills and transform our broken energy system. Our fuel bills are going through the roof, while the Big Six net huge profits: encouraging consumers to find out about better tariff rates is a laughably weak response to such an enormous problem.

The Big Six energy firms – British Gas, RWE, Npower, E.ON, EDF and SSE – supply to 99 per cent of UK households and are currently making huge profit margins of £125 from every household every year. Meanwhile, they stand to make billions more by keeping us hooked on increasingly expensive fossil fuels – instead of developing UK clean energy and energy saving measures needed to secure power supplies, cut emissions, and stabilise fuel bills in the long-run.

And it’s the public who’ll pay – new Friends of the Earth analysis reveals that another generation of gas and coal will cost each household an extra £300 per year by 2020.

When David Cameron called the Big Six in for talks, he should have used the opportunity to demand much bigger changes than clearer tariff rates.

He should be loosening the Big Six’s stranglehold on the energy market to allow in new players, who get their energy from renewable sources like the wind, the sun and waves. Consumers alone don’t have the power to break the Big Six’s monopoly – to create a fairer, greener energy system, we need the Government to act.

This is why Friends of the Earth’s Final Demand campaign is calling for an urgent public inquiry into the behaviour and influence of the big energy companies. We need greater transparency about where they’re investing their profits and how they’re skewing our energy system. It also calls on Ministers not to drop financial support for the feed-in tariff, which enables households, businesses and communities to benefit from producing their own clean power.

Yes, households are being asked to contribute to the cost of developing green energy – but contrary to the claims of some think tanks and commentators, this will be far less than the cost of staying hooked on fossil fuels. The industry itself knows the more businesses invest in green energy, the more its cost will fall – while the cost of gas is only going to rise. Greener energy and energy saving will stabilise fuel bills long term.

Going green and saving energy will also create new business opportunities – hundreds of thousands of skilled jobs up and down the country. In the last year and a half the solar industry has already created 22,000 jobs. Instead of cosying up to the Big Six energy companies who monopolise the market, the Government should shake up our energy system for the benefit of consumers, the climate, and the economy.

David Cameron has shown in the past that he understands the risks posed by climate change and that he’s prepared intervene to ensure we tackle it. Chris Huhne knows that a cleaner energy will give us all a better deal in the long run. We don’t have time for Treasury opposition. If this is going to be the greenest Government ever, it’s high time they had a chat with George Osborne.

Donna Hume is the energy campaigner for Friends of the Earth

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