Ofgem price cap and Future Cities Forum energy infrastructure discussions
Energy prices and protection for the customer is a topic in our future energy blog series, that Future Cities Forum is following closely this autumn as Ofgem has recently announced price caps which it says will aim to lower bills this winter.
We spoke to Mark Bramah, Strategy Lead for Robin Hood Energy, who joined our energy infrastructure panel discussions at our June London City Hall forum, to ask him for a reaction to this important announcement from Ofgem.
Robin Hood Energy is one of the first council owned energy companies and bases its energy supply on renewables - a market that the UK government has been slow to support. The company has been keen to reduce fuel poverty and Mark discussed at our forum how difficult and often costly it is for vulnerable customers to switch suppliers.
On the current Ofgem announcement Mark commented:
'With regard to the Ofgem decision to lower the price cap, it is a bit like the curate’s egg. It is difficult not to welcome it, but from what I have seen it reduces the Standard Variable Tariff cap by 6% which they estimate is a reduction of £75 per year? It is less for pre-payment customers as I think the cap has been reduced by 2%. Ofgem argues that it is passing on falls in wholesale costs which on the whole is better news for consumers and it comes into force for six months from 1 October.
'Whilst you have to welcome it, there are better deals available for consumers who want to shop around. Robin Hood Energy has better fixed rate tariffs for customers than the SVT even with the cap. I also think I am right in saying that Robin Hood’s pre-payment tariff is still cheaper than the cap.
'I suppose the problem is that this can only go so far in terms of addressing issues of affordability. Why people struggle with energy costs is a much more complex matter. It is worth noting that Ofgem estimates that 74% of the electricity market and 73% of the gas market are still dominated by the ‘big 6’ energy companies and most consumers do not switch. It is the most vulnerable consumers, those on low incomes and in fuel poverty who have the least choice.'