IPPR warns on threats to energy market competition

Think-tank the Institute for Public Policy Research (IPPR) has said competition in the energy market is not fully effective in an article published on Monday 20 August. IPPR research fellow Reg Platt argued that competition as further threatened by electricity market reform. He said feed-in tariffs with contracts for difference risk increasing the cost of capital for small suppliers and without a "strong balance sheet to stand behind" small suppliers could find the survival of their businesses at stake. Platt called for Ofgem to issue a "fast-track" consultation to assess the impacts the arrangements described in the draft Energy Bill could have. But he noted competition in the sector would continue to be limited by a lack of consumer engagement, because energy was a relatively "uninteresting" product. Platt suggested if outcomes could not be improved through the competitive market, a return to price regulation should be considered.
IPPR