Rising energy prices, don’t blame the green levy, blame the big 6 cartel

The ongoing political row over energy prices was brought sharply into focus this week as Scottish energy giant SSE raised its prices by 8.2 per cent blaming the green levy as a significant cause. The other 5 big energy companies are likely to follow suit. “We’re sorry we have to do this,” said SSE’s Will Morris. “We’ve done as much as we could to keep prices down, but the reality is that buying wholesale energy in global markets, delivering it to customers’ homes, and government-imposed levies collected through bills – endorsed by all the major parties – all cost more than they did last year.”

Green levies – which include subsidies for renewables and social programmes to fund energy-saving measures for low-income homes and pensioners – make up £112 of the average £1267 dual fuel annual bill, according to Department for Energy and Climate Change figures.

The most likely culprit is the wholesale price of energy.

Ed Davey minister the energy secretary, said “Half of an average energy bill is made up of the wholesale cost of energy,” he said. “This far outweighs the proportion of a bill that goes to help vulnerable households with their bills and to cut energy waste, and to encourage investment in the new low-carbon energy generation we need to keep the lights on.”

As the big 6 energy companies also generate power, blaming only green levies is rather disingenuous, and reflects the uncompetitive energy market we have in the UK. We have recently been reviewing our own energy pricing and there’s very little to choose between any of the big 6, making us think they are in a rather cosy cartel rather than a genuinely competitive free market.

Further reading here:

Energy price rise: David Cameron defends green subsidies

Energy price rise sparks new political row over power bills

 

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