We (the Office of Gas and
Electricity Markets) are on a crusade to scale back energy prices for
businesses and householders for a previous couple of years, but with only six
major suppliers to settle on from, people in Britain haven't had much choice.
Now, we have a replacement strategy: Demand the large six provide wholesale
power to smaller companies with
price transparency up to 2 years beforehand. The new measure is being heralded
as a possible thanks to breaking the monopoly of the large six on the markets,
thus driving down prices for everybody.
Hopes to extend Investments
One of the most reasons the energy market isn't as fluid as
possible within the UK is that it's difficult to work out what proportion
investment is going to be necessary to determine new companies. The shortage of
price transparency then becomes an uncertain bill for householders and
businesses that check-in with a
replacement supplier. By nailing down the worth up to 2 years beforehand,
the investors are going to be ready to determine how big a generation plant
they're going to afford to create and the way many householders will be ready
to serve under the stable pricing scheme. Businesses that know their energy
needs beforehand could also greatly benefit as they will more easily compare business electricity prices for
the 2 years that the pricing strategy is about beforehand.
Trying to fire up the Competition
Businesses, government, and
householders all want additional competition that smaller energy rivals can
create within the energy market. They also want to understand that newer
suppliers won't need to hike their prices dramatically. The matter has been
that the large six energy companies
have dominated the scene and made it difficult for his or her rivals to
compete. By forcing the larger companies to supply wholesale prices to smaller competitors that are transparent
for 2 years beforehand, the likelihood that they're going to attract new
customers and be ready to buy the energy they have to service them profitably
increases and make more competition for buyers. However, some people do not
believe that a mandate to sell to wholesale rivals in this manner may be a
great way to extend competition because it means more enforced regulation of
the energy markets will happen. However, they seem to be within the minority as
higher prices demand some kind of action be taken to stabilize and make new energy markets within the UK.
Political Action could also be needed
So far, previous proposals
to assist create a more balanced energy policy within the UK haven't been met
with strident action by the large six energy companies. Since 2008, we've tried
to implement new policies to scale back the rising cost of energy which has
angered many. As businesses still struggle under higher energy costs and householder bills rise, it's going to be
enough to make political pressure for regulations that support proposals
through legal channels, specifically by enforcing it through the Energy Bill.
The very fact that the Energy Bill is now within the House of Commons puts tons
more weight behind the demand for compliance.
Energy Bill and New Markets
Within the Energy Bill
introduced in late 2012 to the House of Commons already, there's provision for
increasing access to energy markets. Long-term contracts are of great interest
for independent renewable generators and Power Purchase Agreements (PPA) also is covered within the bill. Within the bill
"liquidity measures" are proposed which will enable the govt to
require action should energy markets not conform to the new mandates to extend
competition within the marketplace. Thus, while companies are in no obligation
to scale back prices or offer wholesalers long-term contracts with transparent pricing, the winds of
change is coming and it'll only be a matter of your time before they need to
do so or be forced to try to so by the govt. If the large six energy companies delay or plan to frustrate the attempt
to open energy markets within the UK, it's likely they risk even more
heavy-handed government regulation within their industry as there's a faction
of experts that believe even more radical measures should be taken to make
market fluidity. Thus, it seems the long-awaited regulation of energy markets is true round the corner, bringing
needed relief to businesses and householders while increasing competition
within the market place.
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