Climate change secretary Chris Huhne has said he would welcome supermarket giants Tesco and Asda into the energy market, if they chose to start selling gas and electricity.
‘I would welcome any move by Tesco to sell energy,’ Mr. Huhne told The News of the World. He went on to point out that as Tesco already sells petrol and loft insulation, gas and electricity sales would be ‘a natural step.’
Bigger but not better
The energy market is currently dominated by the ‘big six’ energy companies; British Gas, EDF Energy, Eon, Npower, Scottish Power and Scottish and Southern Energy.
Our latest energy customer satisfaction survey revealed that despite being the biggest, these companies still lag behind some small, independent energy suppliers when their customers were asked to rate them for measures including customer service and value for money.
Energy price rises
Mr. Huhne’s comments come after he encouraged consumers to switch energy supplier as a way of beating price rises, such as the 19% rise recently announced by Scottish Power.
The typical annual saving per household switching to a dual fuel tariff using independent switching site Which? Switch between March and September 2010 was £270.
New entrants may not be the answer
Which? welcomes a greater choice of gas and electricity companies for consumers in the energy market. But there are very few truly independent companies outside the big six.
Major retailers that have already started selling energy have done so in partnership with the big six, rather than in competition with them. Examples are Sainsbury’s, which sells energy supplied by British Gas, and Marks and Spencer, which works with Scottish and Southern Energy.
Challenging the big six
Which? energy campaigner James Tallack says: ‘If the Government wants smaller suppliers to challenge the dominance of the big six companies then there must be a fundamental overhaul of the wholesale market so that independent providers can buy the energy they need to supply large numbers of customers.’
‘In the mobile phone market, Tesco and Asda have partnered with O2 and Vodafone respectively but also compete aggressively on price in that market, so the question needs to be asked: why aren’t these giant companies prepared to go it alone in the same way in the energy market?’
The Co-op has recently entered the energy market, with an offer it says took it 10 years to put together.
For more on how to save on your bills, read our using less electricity guide.
Lower your gas and electricity bills
You can compare energy prices and switch to a new gas and electricity supplier on Which? Switch. People who switched with us between 1 October and 31 December 2013 are predicted to save an average of £234 a year on their bills.
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