Npower was recently fined £2m by Ofcom for breaching the regulations that are set out to deal with customer complaints. The breach by Npower included them failing to record all the details required in relation to customer complaints as well as failing to give customers important details about the Energy Ombudsman’s redress service. This fine follows a similar one given to British Gas in July for a comparable breach of regulations and it has come to light that EDF energy is also being investigated.

It has transpired from Ofcom that there has been a huge rise in customer complaints with over 530,000 received this year. Statistics show this year (to the end of September 2011) that the most complaints were against British Gas who had 197,682 complaints (12.37 per 1,000), Scottish & Southern Energy with 106,444 complaints (12.1 per 1,000), EON with 60,798 complaints (12.16 per 1,000) and EDF Energy had 48,730 complaints (8.86 per 1,000).

It should be noted that a complaint is defined as a problem that hasn’t been dealt with or resolved by the end of the next working day from when it was made – and the reason for all these complaints? It appears to be along the common themes of being billed incorrectly, problems with getting through to the call centre and poor treatment received by the staff at the energy company.

It is no surprise then that consumers are becoming increasingly disillusioned with energy companies as it appears that they aren’t dealing with complaints satisfactory as well as having increased their energy prices. These increased prices during this economic recession means many households face a tough winter and a difficulty paying fuel bills which will plunge many households into fuel poverty.

It is therefore an ideal time for an energy company to start convincing consumers that they understand their plight, needs and complaints. Energy companies currently have a bad reputation and they need to start showing consumers that they can be trusted. It isn’t much for consumers to ask that energy companies comply with all regulations and standards, and look to their needs.

Interestingly, the industry regulator has suggested that new operators should be brought into the sector to help reduce ‘structural inadequacies’. Currently the smaller, lesser known energy companies are performing well and shaming the larger energy companies. Companies such as Ecotricity who had just 0.55 complaints per 1,000 are leading the way. So with a shake-up and additional competitors in the energy sector will this help ensure consumer welfare for all?

Guest Article by Sarah Wain

Smart energy meters are meters that have been developed to help you keep track of your energy usage in your home as well as eliminating the need for meter readings.

The meters work by collecting and storing information about your energy consumption and therefore you can see in almost real-time how you are using energy. It is hoped that this type of meter will make us more aware of our energy usage and allow us to see how savings can be made by using energy at different times of the day; and because the meter readings will also be more accurate it is felt that our energy bills will also be more accurate.

It is envisaged by the Government that all homes in England, Wales and Scotland will have a smart energy meter installed by 2020 to help people identify ways of saving energy and help the UK become more energy efficient. It is also thought that they will help the country cut its carbon footprint as the environmental impact such as emissions from transport previously used to aid the of reading households meters will be eliminated.

But this type of technology, even with all its benefits, is being questioned as to whether it will actually save energy. The consumer group Which? recently announced concern regarding the installation of these meters. They felt that the top six energy companies would use the installation of smart energy meters as a way to sell more household energy gadgets and tariffs to consumers and were calling upon these companies to “don’t sell, just install”. So, this is something to bear in mind when installation of your smart energy meter occurs. You need to be extra vigilant over the sales persons ‘upsell’ tactics.

There is also concern over the data that is collected and stored in these meters as energy companies will be able to analyse this data and possibly use it to their advantage. This could make it questionable as to how much control people will have over their energy usage and efficiency.

However, it is felt that the smart energy meters will help individuals monitor their household energy usage in the future as the smart meters will ensure that we have a better understanding of our utility and appliance usage. Also, the benefits that are trying to be introduced to the environment is only a positive step forward to a lower-carbon economy and ensuring that we become energy-efficient and savvy towards the long-term needs of the environment.

Guest Article by Sarah Wain

One of the UK’s major energy companies has shocked its customers with a huge 19% rise in its gas prices and a massive 10% uplift in electricity tariffs.

Scottish Power has rocked the energy sector with the scale of its rises and will bring down upon itself the wrath of consumer groups already wondering how people can cope with such inflation.

The rises will come into effect on 1 August, but will only affect those not on fixed deals. This has prompted a number of experts to recommend people to sign up fixed deals as quickly as they can.

It’s feared that others will follow where Scottish Power has led and that the other big five energy companies in the UK will make similar rises soon.

British Gas, EDF, E.ON, npower and Southern and Scottish will make announcements soon as to their pricing intentions in the run up to winter. And British Gas has made strong hints that rises are inevitable, given the continually increasing wholesale costs.

But the extent of the Scottish Power increases has stunned customers and energy pundits alike. For the average bill, it has added about £170 which means over a year, the bill has climbed from £1,150 to £1,320.

Scottish Power has over five million customers and has never been adverse to leading the way in announcing price rises. Industry observers had noticed that for the last few weeks the company had been dropping hints about price changes, but the scale of the change has shocked many.

The company were quick to lay the blame firmly at the door of rising wholesale costs, but consumer groups were less impressed with that view, saying that the protection of margins was the real reason behind the rises.

People are being told to get themselves into long term fixed agreements before they might be withdrawn over the coming months.

In a case of almost shutting the door after the horse has bolted from the stable, the regulator of the energy industry is looking at the whole question of whether companies are justified in using wholesale price fluctuations as an excuse to raise their prices, especially when it appears to many that they don’t cut them when they fall again.

The energy companies claim that the situation is more complicated than people believe and that the process of buying energy some months ahead is complicated, and does not always follow what the wholesale market is doing.

One thing is for sure though, Scottish Power won’t be alone for long.

Guest Article by Neil Camp 

The shortage of natural gas, as well as other energy sources in the West, has caused the UK government, amongst others, to reconsider the role of nuclear power in the overall scheme of energy provision.

Natural gas is overwhelmingly the fuel of choice for energy providers and governments alike, but with supplies dwindling in the UK (despite hopes that shale gas reserves will win the day), there is perhaps an inevitable drift back to the idea of nuclear power providing the answer.

The downside of nuclear of course is the risk of catastrophic explosion which, in the public’s mind, gives it a terrible reputation. It is of course a very clean fuel (effectively no carbon emissions), if you discount the dangers and waste product at the end. But it would appear that UK ministers will have to copy their counterparts across the English Channel and opt for more nuclear power stations.

And this is not a decision which can be delayed. A small number of Britain’s nuclear power stations are getting past their sell-by date and some are ready to be shut-down. New nuclear power stations, if the green light was given now, wouldn’t be ready until about 2018 at the earliest.

But whilst the UK Government is agonising over whether to commission new nuclear power stations, there remains the complicated task of safely decommissioning those power stations which are ready to be shut down.

And one of the first stations to finish its lifespan was the Berkeley nuclear power station in Gloucestershire. It has the distinction of being the first commercial nuclear power station and made use of a Magnox reactor.

It actually finished generating power in the 1980s, a trouble-free 30 years of service. Most of the radioactive material and waste was shipped to Sellafield around 20 years ago. But 1,000 tonnes of intermediate level nuclear waste was left behind.

It was first built in the 1950s on the River Severn and when at full power, could produce enough electricity to run a major City. Now it lies idle, with its huge cavernous buildings – around seven stories high – stripped clean of pipework and fittings.

Now the old reactor rooms have a new purpose – to store the reactor’s old casing and core. Indeed, once locked, the reactor rooms will not be opened for around 65 years, the time it takes for the nuclear material left to degrade to such a point when it can be safely handled and then deposed of.

Berkeley has now reached what they call in the industry as “…entering Safestore…”. This is the second stage of decommissioning a nuclear power plant and is just one of a number of stages that have to be religiously followed before a retired power station can be declared safe.

This sort of decommissioning process reminds the public just how dangerous nuclear waste is, when compared to say natural gas, although it seems likely that before long, the construction of new nuclear power stations will start.

Guest Article by Neil Camp 

News that Sasol has acquired a huge stake in Canadian gas providers Talisman has reinforced the hope that shale gas will become a new wonder fuel for many countries.

Gas providers Talisman accepted $1 billion (roughly £650 million) from Sasol, the energy and mining giant, for a 50% stake in the Farrell Creek shale gas field in British Columbia. The two companies have also agreed to collaborate on a number of other projects involving natural resources. Talisman will continue to be responsible for operating the field.

A Sasol spokesperson said:
“The quality, notably the thickness and richness of the shale, and size of the Farrell Creek resource base, as well as its expected production profile, makes this a highly attractive asset for Sasol.”

Shale gas is a comparatively new natural resource which is being seen in the West – there are said to be huge reserves in the US, UK and mainland Europe – which can help alleviate the energy problem. But it is still a natural resource which is comparatively unknown. It is said that shale gas supply in the US will make up half of the total natural gas supplied.

The implications of this are hugely significant for governments who think that these new reserves will protect against other countries with plentiful natural gas supplies, such as Russia and major Persian Gulf states, dictating gas prices throughout first half of the 21st Century.

As the name implies, the gas – which is natural – is produced from shale. It has been around for many years, but has only become a potential commercial proposition because of the dwindling natural gas supplies in many other countries. The problem has been that to develop such gas fields in the past has been too problematic and too costly. And previous excavation has had to rely on the natural fractures which can be then collected, rather than being ‘bored’ and then collected. But new hydraulic fracturing techniques means that the shale gas can be actively mined when needed.

The only downside with this new method of proactively fracturing the gas is that there are reports that watercourses are being damaged and some residents – close to shale gas extraction sites – have been complaining that their water has become contaminated. But it’s likely that such teething troubles will be ironed out, especially if the gas turns out to be a truly profitable natural resource.

And gas providers in the US, UK and mainland Europe, will be delighted if they have a new source of natural gas on their doorstep.

Guest Article by Neil Camp