Wholesale costs account for 60% of consumers’ energy bills. Between 2001and 2013 gas bills rose by 137% and electricity bills by 66%. Energy suppliers largely blamed the increases on a rise in wholesale costs, but consumers don’t believe these claims – 84% think that profits rather than wholesale prices are driving the increases.
This report, published by Which in July 2013, examines whether energy companies are playing fair and whether the wholesale energy markets are up to the job.
The report’s findings do little to give consumers confidence: The structures of the biggest companies raise serious questions of conflicts of interests; much price setting and trading is hidden away behind closed doors; and the volume of trading and level of competition in the open wholesale markets is low.
The report calls on Government to conduct an independent review to determine the actions needed to drive open and intensify competition in both the wholesale and retail energy markets – ensuring that prices are kept in check. It presents a package of proposals designed to give competition in energy its best chance of success.
See our full report: