POWERCUTS

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A meeting between the Prime Minister, the Energy Secretary and The Big Six energy companies took place against a background of growing anger among consumers over rising energy costs. The solution, according to the government, is for consumers to shop around for a better deal, pay by Direct Debit and use less fuel! Brilliant, that's telling them Dave!

Soaring energy prices are killing 2,700 people every year. The shock death toll is more than the number killed on Britain's road each year. The stark findings emerged as The Sun newspaper called on the Big Six energy suppliers to keep a lid on prices this winter. In a landmark report, Professor John Hills warned fuel poverty was claiming thousands of lives. The expert from the London School of Economics said there are 27,000 extra deaths in England and Wales every winter.

He explained, "Recent analysis attributes about a fifth of excess winter deaths to living in cold homes. Even if only half of this in 2009 is due to fuel poverty, that would still mean 2,700 deaths, more than die on the roads, each year. There's also evidence of people having to face the heat-or-eat trade-off." Thousands more living in freezing conditions suffer serious health problems. People are in fuel poverty if they spend more than 10% of their income on heating.

By 2009, four million households were in fuel poverty. Which? executive director Richard Lloyd said, "We have even more deaths in winter than cold countries such as Sweden and Norway. That shows how far we have to go. If companies don't respond to these basic demands then it will fuel consumer anger and confirm the opinion that many already have, they are not serious about doing everything they can to help people get through a tough winter."

Energy Secretary Chris Huhne was urged to "put the boot in" to the Big Six. MPs angrily hit out at soaring fuel bills in a heated House of Commons debate. Albert Owen, a Labour member of the energy select committee, told Mr Huhne, "You need now to put the boot in to the Big Six and make sure that our customers get the compensation they deserve." Caroline Flint said the recent Downing Street energy summit had been worthless.

She said, "It was the ideal opportunity to get a grip on spiralling energy bills. But what was the big idea? What was the bold plan? Go compare." But Mr Huhne accused Labour chief Ed Miliband, formerly Energy Secretary, of failing to get a grip on the energy crisis. He said families in the UK now spend more on energy every year than they do in Sweden, where average temperatures are seven degrees below ours.

He admitted rising energy prices were "hitting households hard". But he added, "That is why we are focusing on the things that will make a difference this winter and in the long-term. First and foremost, consumers need to know how they can cut their energy bills right now." Martin Lewis, of MoneySavingExpert, said, "Prices are simply too high for many people, and companies need to do far more. We can no longer let them run the agenda, it's time people fought back." (Source: The Sun, Oct/11)

Energy regulator Ofgem warned that Britain was heading an energy crisis with households facing blackouts and bills of up to £2,000 a year. The body called for an emergency £200 billion to be invested in energy supplies to save the country from blackout and it suggested a central energy buyer was needed to set the amount and type of new power generation needed. They warned that the crisis could hit the UK as early as 2015, and that an increasing number of people would not be able to afford enough energy.

Ofgem chief executive Alistair Buchanan said, “The overwhelming majority of responses to Ofgem’s October consultation show that there is an increasing consensus that leaving the present system of market arrangements and other incentives unchanged is not an option. The higher cost of gas and electricity may mean that increasing numbers of consumers are not able to afford adequate levels of energy to meet their requirements and that the competitiveness of industry and business is affected.”

Ofgem said the next 20 years would see unprecedented challenges for the sector because of the decline in indigenous gas supplies and the need to cut carbon emissions. Lib Dem energy spokesman Simon Hughes said, “We need to plan for maximum independence in energy for Britain and maximum independence in energy for Europe. In the meantime, the regulator needs to make sure fuel prices are fair prices and that the energy companies stop the regular exploitation of vulnerable customers.”

Energy and Climate Change Secretary Ed Miliband said the Government was “confident” of meeting energy supply needs in the years ahead. He said a low-carbon transition plan would deliver secure supplies until 2020. He said, “However, for the longer term, Britain will need a more interventionist energy policy. The scale and upfront nature of the low-carbon investment needed is likely to require significant reform of our market arrangements to deliver security of supply in the most affordable way.” (Source: Daily Express, Feb/10)

Anyone who knows about the state of the world's energy problems will tell you the lights could soon be going out all over Britain. The problems stem from the privatisation of the electricity industry here in 1990. By opening up the industry to competition you keep prices low which is great for consumers in the short-term, but we're starting to feel the long-term side-effects. Electricity-generating companies are going bankrupt because the wholesale price of electricity is so low, driven down by Ofgem, the Government regulator. Because the companies are losing money, they've mothballed a lot of equipment and now unexpected surges in demand can't be met.

For example, before privatisation, the Central Electricity Generating Board always made sure we had a spare capacity of 28%. This meant that they could cope with a surge in demand or a power station breakdown. Today the figure stands at just 8% and because firms have cut expenditure, there aren't enough engineers to repair damaged power lines. One company have cut the number of engineers by 90%! Demand is increasing and the Government needs to take the problem seriously.

The first thing it should do is encourage the electricity firms to have a spare capacity with capacity payments. We also need to look at how our electricity will be generated in years to come. The Government is keen to run down nuclear power and opt for gas-fired power stations and renewable sources like wind but there are problems with this. Our North Sea gas is running out and by 2010 we will be importing 50%.

By 2020, this will rise to 90%, meaning our gas will be coming from places like Russia, Nigeria and Tunisia and we could be subject to massive price rises. The blackouts we've been seeing across the world in the past 12 months should act as a wake-up call to Governments around the world. If we fail to act, our nights will get longer and darker.

The Competition Commission is being urged to launch an inquiry into Britain’s energy companies after millions of home owners were hit by huge bill rises. Shadow Energy Secretary Meg Hillier said public trust in the “big six” suppliers had “sunk so low that only an external investigation” could restore faith. She also accused the Government of breaking its pledge to help households as plans for its “Green Deal” were sidelined. British Gas announced that gas bills for nine million home owners would rise by 18% from August, with a 16% rise in electricity bills. The change means the average dual fuel customer will pay £190 more a year.

Labour MP John Robertson branded fuel suppliers “burglars” and said British Gas bosses should be hauled before a Commons committee to explain the rises. Ms Hillier said no one could afford another price rise as household finances are stretched thin by pay freezes, petrol price rises and soaring food costs. British Gas, which posted profits of £740million in February, claimed it had no choice but to raise bills because wholesale costs had gone up by 30%. It followed an announcement by Scottish Power last month that bills for its 2.4million customers were to rise by 19% for gas and 10% for electricity.

Industry regulator Ofgem is already investigating the industry for profiteering. It said suppliers had bumped up tariffs quickly when wholesale prices rose, yet had been slow to cut them when costs fell. Ms Hillier said it was time for the “big six” to face a Competition Commission inquiry to see whether their stranglehold on supply was inflating prices. She said, "Public trust in the energy companies has sunk so low that only an external investigation can restore that. The big six should not fear this. They tell me they will welcome an outside view.”

Her comments come ahead of a White Paper on reforming the electricity market. It will be published next week, but the reforms could take a year to become law. Meanwhile, plans to give home owners access to grants of up to £10,000 to insulate their homes as part of the Government’s “Green Deal” have been put on hold. They are included in the Energy Bill, but it is not timetabled before the summer recess, pushing any changes back to 2012. Ms Hillier said Energy Secretary Chris Huhne lacked the political clout to push the Bill back up the political agenda.

She said, “Energy Secretary Chris Huhne just does not get it. People are struggling now. This Government is squeezing households so tight they have nowhere to go when another commodity increases in price.” Mr Robertson, who sits on the Energy and Climate Change Select Committee, said, “There are new burglars in this country and they are the energy companies. They are robbing British households blind. When disposable income has fallen 2.7% and households are struggling, these price rises are deeply irresponsible and a disgrace. It will be a cold, bare and hard Christmas this year for many.” (Source: Sunday Express, Jul/11)