Independents suffer as wholesale prices rise

The volatile state of the current energy market has been highlighted within recent weeks, indicated by the collapse of GB Energy in November. As one of the new independent suppliers, GB Energy had 12 staff and around 160,000 customers on the database. But what caused their demise?

Wholesale prices have risen dramatically over the past few months and smaller energy suppliers are struggling to keep up with supply and demand.

Industry analysts and experts predict that this will be an ongoing trend over the coming months and years for the new suppliers as they can't handle the rising costs of supplying their customers. Despite having a poor year, it looks as if the Big Six will start to see an increase on their market share with more independents dropping from the race.

The UK government has encouraged the development of over 40 companies in the last five years due to their belief that the competition will help to drive down the overall cost of customer's bills. Weaker prices in 2014 allowed new suppliers to take advantage and offer more appealing deals to potential customers.

Prices were already on a steady rise in the UK following the trend of oil prices, however the decision to leave the EU resulted in higher costs for importing gas, coal and electricity.

Four of the Big Six energy suppliers are owned by companies in mainland Europe, so it is currently believed that their prices may not be too drastically affected. EDF is French, EON is German, Scottish Power is part of a Spanish company, and NPower run by a company in Germany.

Power supplies are tightened heading into winter as demand rises. How this will affect prices for consumers is yet to be seen.

It is more important than ever to make sure that the price you're paying is the most competitive on the market. GB Energy customers have been taken over by Co-Op Energy, however there is still the option to shop around - an automatic transfer may not always mean the same tariff or discounts. For more details on saving on your energy spend visit energyadviceline.org.uk

Consumers should brace for price hikes

Consumers should ensure they shop around for the best energy deals now, following warnings by experts that the weaker pound is pushing up the cost of imported gas and electricity, according to the Energy Advice Line.

Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said one supplier had already announced a 30% hike for around 70,000 of its customers.

GB Energy Supply, a new supplier that entered the market in January last year, recently announced it would increase average annual bills from £820 to £1,060 for customers on its standard variable deal. In August, OVO Energy announced a 3.6% increase and Co-operative Energy put up prices by 3% in October.

Industry analysts have predicted that other suppliers will follow suit. Samuel Tombs, chief UK economist at Pentheon Macroeconomics, was reported last week as saying that bills could go up by 5% in the short term and 15% over a longer period. This was in response to the wholesale costs for gas and electricity jumping by 20% and 50% respectively since the summer.

"It's now time to act without delay," Mr Morgan said. "Consumers need to shop around to get the best deals.

"The trend is upward for energy prices and consumers need to be pro-active to protect themselves from nasty surprises as the cold weather sets in.

"It's widely expected that the Big Six suppliers will raise their prices this winter, with potentially further price hikes to come down the track."

Mr Morgan said that consumers should shop around and consider locking themselves into fixed deals while they were still available. Although prices were generally on the rise, there were still very good competitive deals available.

"The potential savings to be made through switching are significant, particularly if you have never switched before, or haven't done so for a while," Mr Morgan said.

"Ofgem estimates consumers can save £300 annually but it very much depends on how often you switch.

"For those consumers on a standard energy tariff - by far the most expensive - the savings to be achieved by switching could be even more than £300 annually.

"And even for the very small minority of customers who switch suppliers regularly, shopping around is still well worth doing, even though the savings will be less."

The Energy Advice Line is a consumer champion and an independent price comparison and switching service for householders and small and medium-sized businesses. The service enables consumers to quickly and simply compare electricity and gas prices, and to switch to the best available deal on the market.

The service also offers free advice and a contract management service, including alerts to remind business consumers when their fixed-term energy contracts are about to end.

For further information, visit energyadviceline.org.uk

Is the UK at risk of energy shortages?

As cooler weather begins to roll in the talk of energy shortages and blackouts has returned. However, this year it is reported that our smart energy revolution can help to combat the issue, according to the UK chief of the National Grid.

Nicola Shaw has commented that an 'internet of energy' will help our white goods balance the demand on our energy supply. Whereas counter arguments have formed saying that what the UK really needs is more power generated from gas as a back up this winter.

Shaw believes that supply can be managed simply by UK households changing their demand patterns. She agrees that gas power could help, but doesn't not agree that it's the way forward. Statistics show that between 30% and 50% of energy fluctuations could be smoothed out by both households and businesses adjusting their demand during peak times.

Many energy suppliers currently offer cheaper prices outside of peak times, such as after midnight and before 8am. This doesn't suit most businesses, but households can adapt where possible to help make small savings. A firm in Cornwall has created an incentive for it's customers to use more power when the sun is out thanks to the extra solar power.

Speaking to BBC News, Shaw stated "we are at a moment of real change in the energy industry", meaning that the large energy organisations are now mostly using solar power in order to generate their supply.

People are already changing their energy usage in order to place less pressure on the system, and it's this smart usage of energy that will help us to avoid any unnessecary power cuts and blackouts this winter.

Embracing 'smart energy' and being wise about your spend will help the industry to progress into making new discoveries about how the country can be powered. If you're ever unsure about the figures on your bill then simply pay a visit to energyadviceline.org.uk - businesses and homeowners can receive free energy advice.

Should We Fear Black Outs This Winter?

This month the National Grid issued a notice to energy suppliers asking for a greater supply. This was the first time such a warning has been issued in three years. The request was for an additional 500MWs between the hours of 16:30 and 18:30 on Wednesday 4 November.

This amount of power is equivalent to the surge you would expect during the half time of a sporting event, when everyone rushes to boil the kettle at once. More power was requested after several plant breakdowns occured during the month of October.

A statement said: "National Grid has issued a notice to the industry...asking for more generation to be brought on to the system.