Ofgem has published final proposals that will give independent energy suppliers a more level playing field to compete against their larger rivals.
They will also increase competition between the big six who, together with the two largest independent power generators, will be required to trade fairly with small suppliers.
Under the proposals, the big six suppliers will have to post the prices at which they buy and sell wholesale electricity on power trading platforms up to two years in advance. They will be obliged to trade at these prices, which means independent suppliers and generators will have far more opportunities to buy and sell the power they need to compete effectively.
Posting prices in this way will make wholesale prices clearer for all firms in the market.
The new licence conditions will be backed by Ofgem’s powers to fine companies if they are in breach.
Andrew Wright, Senior Partner for Markets at Ofgem, said: “Our aim is to improve consumer confidence and choice by putting strong pressure on prices through increased competition in the energy market. Ofgem’s proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers, who will get a fair deal when they want to buy and sell power up to two years ahead.
“Greater price transparency will assist investors seeking to build new generation plant and help secure supplies for consumers, who are also set to benefit from a simpler, clearer and fairer energy market thanks to our retail market reforms.”
For further information, please see the Ofgem press release.