Last updated: June 2017
The Vital Statistics
Electricity generation capacity owned by the companies
There is considerable difference in the capacity that companies own, even among the Big Six. Figures are shown in the table below:
The grid mix of the different suppliers
The fuel mix of the electricity supplied by the different suppliers in 2015 is shown in the box below – if you want updated figures at a later date, they are easy to obtain from the electricityinfo.org website. However, as described in our feature on Green Tariffs, how meaningful this is with regard to renewables is very debatable.
Per kWh, the cost of electricity has been steadily rising for over a decade, but this has been offset by the fact that we are now using less energy as a result of improved appliance efficiency standards, and the average bill has stayed about the same.
Over the past few years, the Big Six have been repeatedly accused of profiteering and price fixing, and the Competition and Markets Authority (CMA) spent two years investigating the sector between 2014 and 2016. Eventually, however, it did not find evidence of price fixing, and back-peddled on previous claims about how much the Big Six had been overcharging customers.
Many people have called the investigation a whitewash. The CMA agrees that the smaller suppliers generally charge substantially less. This is rather odd considering that, in most cases, the product is basically identical, and you would expect the Big Six to also be benefiting from economies of scale. So there surely must be something going on.
You are probably paying more than you need to
What the CMA did say unequivocally was that many people are paying far more than they need to. Differences between tariffs can amount to 20% of an average bill. This is quite a new development, and many people may not yet have caught on that they can save a substantial amount of money by shopping around.
Companies must now produce a Tariff Information Label and a Tariff Comparison Rate to allow customers to see key information about their tariff and compare it with others. This should mean that finding the best deal is easier, however, watch out for price hikes in year two.
You’re unlikely to be losing customer service by switching to a cheaper tariff. The CMA say, “we have seen no evidence to suggest that suppliers offering the cheapest tariffs have worse quality of service than those offering more expensive tariffs”.
The whole thing also has large social justice implications. The CMA found that those who don’t switch are likely to be people who are struggling financially, without qualifications, over 65, on low incomes, living in social housing, disabled, or single parents.
They also found that the people who would gain the most from switching, those who are currently paying the highest prices, tend to be those with incomes below £18,000, in rented accommodation, or in receipt of a Warm Home Discount rebate. In other words, the energy companies are milking the most vulnerable members of society.
Addressing the social issues around bills
A few companies are explicitly trying to address the anti-poor nature of the gas and electricity market. Ebico, a tiny supplier with Christian roots, charges all its customers the same price regardless of how they pay, meaning that it uses the extra income from direct debit customers to keep down prices for pre-pay and quarterly consumers, who are generally the poorest.
Robin Hood Energy makes a point of saying that it does not switch customers onto expensive tariffs when their old contract expires, as the Big Six often do. And the companies which have only one tariff, such as Ecotricity, can’t do this anyway.
In terms of the wider issues, you could argue that the level of concern about energy bills is an argument for prioritising investment in the cheapest renewables, as they give the biggest bang for their buck. However, low-carbon policies, including subsidies and carbon taxes, currently only account for about 9% of an average energy bill,2 while, as described above, the difference between different tariffs can itself amount to 20%. In other words, it is not low-carbon policies that are the cause of fuel poverty.
Which Companies back Fracking?
If you’re concerned about the expansion of fracking in the UK you might want to avoid companies that are involved. Many are keeping quiet. The information we have found on the companies in this guide is below. Note that the first shipment of US fracked shale gas, imported by Ineos for manufacturing, arrived in September 2016. See our feature on fracking for the latest campaigning efforts.
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Barclays fracking campaign win
Barclays is withdrawing its investments from fracking company Third Energy, according to a response by Chairman John McFarlane to a 70,000-strong petition against fracking that was presented to him at the company’s AGM in May.
Third Energy is licensed to frack in Ryedale, North Yorkshire: the only site other than Preston New Road which currently has permission in the UK. It is majority owned by Barclays.
Barclays was targeted by activist network RisingUp! during the Global Divestment Mobilisation week in May with people openly graffitiing branches with anti-fracking messages in Bristol, Stroud and Huddersfield. A #StopBarclaysFracking week of action in October saw 100 actions targeting the bank in a single week.
“This is... a testament to the strength of people power and tireless campaigning from people all over the country,” said Fossil Free UK.
But it’s not the end. Barclays is the UK’s biggest bank backing fossil fuel extraction globally, with over $65 billion invested in new fossil fuel infrastructure. It is also the banker for, and 4th largest investor in IGas Energy, the company with the most oil and gas exploration licences in the UK. The fight goes on.
Company behind the brand
Ecotricity was started in 1995, which makes it the father figure of the specialised green suppliers. It has built the most renewable capacity of any of them, mostly wind. The 70 MW that it now owns is about 0.5% of the UK’s total wind capacity.
Ecotricity is owned by the reportedly eccentric Dale Vince, who is interested in a lot of environmental ideas, and the company runs various side-projects such as building an electric sports car called ‘Nemesis’. Vince blogs on climate issues. In 2010, he bought much of Forest Green Rovers Football Club, was appointed chairman and persuaded the whole club to go vegan.
Want to know more?
If you want to find out detailed information about a company and more about its ethical rating, then click on a brand name in the Score table.
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1 UKERC Energy Policy Review 2016
2 Committee on Climate Change, 2016, Next Steps for UK Heat Policy
3 Committee on Climate Change, 2017, Energy prices and bills – impacts of meeting carbon budgets