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New Tariff Proposals Will Not Halt Energy Price Rises

November 20, 2012

Excuse me if I am a little bit cynical about the proposed squeeze on big utilities tariffs. 

The proposals limit suppliers to four "core tariffs" per fuel. Energy Minister Ed Davey says that “Bill payers will no longer face the impossible choice between hundreds of tariffs; each customer will have a maximum of four tariffs for gas or electricity per supplier to consider". This can’t be a bad thing.

Ed Davey also admits: "The government cannot control volatile world energy prices. So the danger is that when the “Tariff merry-go-Round” stops, we still face increasing energy prices.

We will of course look hard at the detail of the initiative but there are still hurdles at which it could fall: going through Parliament as part of the Energy Bill being one of the most critical. Trade-offs and compromise are part and parcel of the progress of any Bill and many proposals do not come through entirely unscathed.

Some groups, the Institute of Directors among them, say that that restricting choice could simply allow energy companies to increase their lowest tariff, ensuring a higher minimum price for consumers. Even the Chief Executive of Energy UK, on behalf of the major suppliers, said any fall in energy bills could be limited because about half a bill is made up of costs other than energy.

So, all power to Ministers’ elbows but Gaia-Wind turbine owners have the power (excuse the pun) to escape from the constant round of energy price rises. “Small wind turbine owners can play a ‘Three Card Trick’, to achieve “energy Independence” from spiralling energy costs. They can:

  • Offset their utilities bill by using their own energy – even switching from e.g. oil heating can be cost efficient
  • Sell the remainder of their energy generation back to the Grid; and
  • Still receive considerable FIT payments of 21 p for every Kilowatt generated.

Johnnie Andringa

CEO Gaia-Wind

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