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"Reform the Electricity Supply Industry" Calls Liberal Democrat Councillor

December 19, 2018 2:43 PM

solar"The privatised electricity supply industry has been a rip-off from the word go!" claims Hertfordshire County Councillor for Tring & the Villages, Nick Hollinghurst "and Ofgem, the complacent so-called regulator is complicit in all this."

He continued "The electricity supply industry is nothing but a number of trading intermediaries who add little by way of value, but a lot of cost.

"The energy comes from producers - power stations, wind turbines, hydro power and solar farms. The physical distribution is carried out by the National Grid.

"The suppliers buy power in the wholesale markets, read the customer's meters and send out the bills to the likes of you and me. Of course they have a chance to make a profit on the difference. None of this is of interest to the consumer who just wants the lights on and the bills low.

"However to justify their profits, the supply company's pretend to compete - which is not easy since they all supply an identical product. To give the illusion of competition they devise complex, ever-changing tariffs, cheat their long-established customers by failing to tell them about better deals and give the opportunity to customers to vary, in theory, the proportion of renewables in their households energy mix. This too is a bit of an illusion since if I pay a bit extra to imagine that I get a bit more wind-produced energy in my household supply, other people will just get a bit less.

"This whole rigmarole is so difficult to follow it has been described by sales professionals as 'confusion marketing'. But with all the customers so confused, on average the suppliers make more profit."

So Cllr Nick Hollinghurst is calling for a radical reform of the retail energy market by eliminating the whole costly structure of retail suppliers. He said "The need for reform is made more urgent by recent news that four of these suppliers collapsed over the last two months and there is concern about a fifth."

Nick outlined his reform plans as follows:

  • all consumers to be given Smart Meters;
  • Power generators inputting details of energy supplies and the prices they are willing to charge, fed into the grid supplies;
  • an AI computerised energy supply market capable of generating a simple tariff system taking into account geographical and demand factors such as transmission costs to consumers and grid balancing factors for larger commercial users;
  • algorithmic smoothing to provide cost and price stability quarter to quarter and region by region;
  • cost of operating the market pricing and billing system plus financial costs associated with bill smoothing to be borne by a consortium of major suppliers;
  • access fees for market participation by non-consortium suppliers (who could in theory be anywhere in Europe or North Africa).

This will drastically reduce the costs associated with the inefficient and expensive retail suppliers, link production and consumption closer together and produce a simple tariff structure that will be cheaper for consumers and easier for Ofgem to regulate.

"I call on the government to implement a regional pilot scheme for this simplified system without delay!"