A committee of MPs has warned that an initiative to introduce smart meters to homes across the UK could end up costing domestic consumers more money unless efforts are made to regulate energy suppliers.

Casting doubt on energy suppliers’ capacity to pass on savings to consumers, the committee noted that the domestic energy market in the UK is hardly the most competitive, suggesting natural market conditions would be insufficient to protect consumers. Which? has also called for the Government to adopt a more hands-on approach to the task of rolling out smart meters to at least 80 per cent of households on the grid – a legal requirement under European Community (EC) directives.

The European Community Task Force for the Implementation of Smart Grids into the European Internal Market states that “Member states shall ensure the implementation of intelligent metering systems that shall assist the active participation of consumers in the electricity supply market in line with… the electricity and gas internal market directives”.

The MP committee has questioned whether the existing framework for implementing the directives is sufficient to “assist the active participation of consumers”. In other words, would energy savings from smart meters actually be passed on to consumers? Chair of the committee, Margaret Hodge, is uncertain.

Ms Hodge said: “Consumers will have to pay suppliers for the cost of installing and operating smart meters through their energy bills and no transparent mechanism presently exists for ensuring that savings to the supplier are passed on. The track record of energy companies to date does not inspire confidence that this will happen.

“The Government is relying on competition in the market, but, as has been previously reported by Ofgem, the energy market does not currently operate as an effective competitive market”.

Smart meters can help energy users save money by highlighting appliances and systems that consume the most electricity, thereby shaping usage habits and purchases (such as replacing an energy inefficient central heating boiler with one that uses gas and electricity more economically). If consumers are required to pay for the implementation of the EC directives, however, it is entirely possible that households will end up paying more money on energy bills in the short-term.

With the announcement that E.On is to cut their customers’ electricity bills by 6%, Scottish Power remains the last one standing to drop energy prices after EDF Energy, British Gas, npower and SSE all confirmed price cuts last week.

For E.On’s 3.7 million electricity customers, the drop will come into effect from 27 February. With no one implementing a dual fuel cut, the energy provider’s gas prices will remain unchanged.

According to E.On – now the fifth of the “Big Six” energy firms to instigate cuts to either gas or electricity tariffs – around 75% of the households it supplies will benefit from a reduction in their average annual bill of around £31.

Thanks to falling wholesale energy prices, energy companies have been facing increasing pressure to pass on reductions to customers.

“Whilst we’re pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise,” commented E.On UK’s chief executive, Dr. Tony Cocker.

Dr Cocker added that as one of the UK’s largest energy providers, E.On is committed to providing financial advice and support to its millions of customers, including helping them to benefit from energy efficiency measures such as loft insulation and cavity wall insulation.

“Over the coming months we will continue to help our customers to monitor their energy use and control their bills so they become energy fit,” he added.

The cuts will take a customer’s average annual dual fuel bill to £1,159 which would make E.On’s standard tariff the third cheapest after npower and EDF Energy.

It seems Scottish Power’s customers will have to wait a little bit longer to hear whether they will be in line for similar price cuts.

Are you struggling to pay your energy bills? Are you too scared to put your central heating on? If the answer is yes, then help is at hand thanks to Big Energy Week. 

Citizens Advice, in conjunction with energy suppliers, consumer organisations and Government agencies, has today launched Big Energy Week, a campaign designed to offer money saving help and advice to consumers looking to reduce their energy bills.

To back the launch of the campaign, Citizens Advice has revealed the findings of a recent study, which claims two in five people are worried that they will not be able to pay their next energy bill. The study revealed that 43% of people fear being unable to find the funds to pay their next fuel bill, while one in two of the survey’s participants said the rising cost of their energy bills would be a strain on their finances.

Last year the charity dealt with more than 95,000 fuel debt problems. Chief executive Gillian Guy said every day they were called upon to help people who simply cannot afford to pay their fuel bills, thanks to prices hikes which put even more pressure on finances when money is already tight.

“We’re worried that some people are struggling unnecessarily because they’re not on the best deal, live in homes that hemorrhage heat or are not getting all of the financial help available to them.”

Running from 16 – 21 January, Big Energy Week aims to highlight the measures consumers can take, which will help them save money and cut back on their energy cost, including:

• Keep on top of your bills – by working out how much your spend on your fuel bills, you’ll be able to budget to cover the costs.
• Search around for the best deal – according to the CA a household could save up to £200 annually by switching suppliers
• Implement energy efficient home improvements, such as cavity wall insulation, installing a new energy efficient boiler or fitting loft insulation. Check to see if you are eligible for a grant – such as the Warm Front scheme in England – to help insulate your home.
• Other energy saving measures, such as turning your thermostat down by one degree and making sure you don’t leave appliances on standby will help to reduce your energy costs.

If you are struggling to pay for your fuel bills, contact your energy supplier straight away. They should be able to offer you affordable repayments and may even be able to offer assistance when it comes to insulating your home.

For more information please visit the Big Energy Week website

In a month known for its doom and gloom, energy customers might be feeling a little less of the January blues, with the announcement that several big energy firms are to cut their energy costs. 

On Wednesday, EDF Energy became the first of the “Big Six” energy providers to cut energy costs, by announcing a 5% drop in its average gas prices. While electricity prices will remain unchanged, from 7 February customers will see the reduction come into force. Just two months ago the company had increased their gas prices by 15.4 percent%

“We know customers are finding it difficult, particularly during winter. So I am pleased we have been able to make this announcement now and help our customers at a time they use more gas,” said Martin Lawrence, EDF Energy’s managing director of customer supply.

Increasing the pressure on their counterparts to make similar cuts, British Gas followed suit by announcing plans to implement their own reductions, cutting its standard electricity tariff by 5% with immediate effect. The move will see 5.3 million of its customers benefit from a saving of around £24 on their average annual electricity bills. The company, which has no plans to bring down its gas prices, said the reduction will make them the cheapest for electricity.

The announcement comes just six months after British Gas customers had to endure a massive 18% increase in gas bills, whilst electricity costs were hiked by an average 16%.

“We want to keep prices as low as possible for our customers. Household budgets are stretched, and we are doing everything we can to help our customers keep their bills down,” commented Ian Peters, Managing Director for Energy.

Energy suppliers came under fire last year for hiking their prices, given the falling cost of wholesale energy. Consequently, they have faced mounting pressure from consumer groups and the Government to pass on the reduction to customers by cutting their energy costs.

Hot on the heels of EDF and British Gas, Scottish and Southern Energy (SSE) will be cutting 5% off their gas prices from 26 March, resulting in an annual saving of around £28 annually for its 3.4 million customers. While Npower has also bowed to pressure and confirmed plans to cut gas prices by 5% from 1 February.

Disappointingly, none of the aforementioned energy providers have announced plans to implement duel fuel cuts. E.On and Scottish Power have yet to make similar price cuts, although with four out of the six major suppliers dropping their prices it’s only a matter of time.

For British Gas, EDF, Npower and SSE, the move is no doubt designed to try and improve their reputations, which are at an all-time low. But for most customers such minuscule reductions will have little impact on their central heating and household energy bills.

Quite simply, it’s a case of too little, too late.

The University of Leeds has completed a two-year study into the potential benefits of creating a low carbon area in the region around the city of Leeds.

Researchers at the university have calculated how a region-wide implementation of energy-saving measures such as installing solar photovoltaic panels and establishing park-and-ride schemes might benefit the city. According to the findings of the study, substantial savings on energy bills – both domestic and commercial – could be made if sufficient investment is provided by government.

Professor Andy Gouldson of Leeds University’s Centre for Low Carbon Futures, claimed that the region of Leeds, Barnsley, York, Wakefield, Calderdale, Bradford, Craven, Kirklees, Harrogate and Selby, which has an approximate population of three million, would be able to shave £1.2 billion off its annual energy bill of £5.4 billion by implementing basic energy-saving measures, however, any such initiative would require £4.9 billion of public funding or private investment.

A more ambitious strategy to cut carbon emissions in the area was examined by the university. Costing £13.03 billion, the measures would save the region £1.71 billion in annual energy bills.

Professor Gouldson wrote: “The business case for major scale investments in energy and carbon management is very strong.

“If local government can underwrite early stage investments, as is happening in some places, then major flows of private sector investment can be secured. Investments can come from institutional investors such as pension funds, or in the near future through the Green Deal”.

The professor further noted that, despite the high levels of investment required, there were compelling “economic, social and environmental” reasons for implementing energy-saving measures at region level.

Responding to the study, Tom Riordan, the Chief Executive of Leeds City Council, wrote: “What this report demonstrates very clearly is that rather than being a ‘nice to do’, this is a ‘must do’ for an economy which wants to become more competitive”.

Implementing conventional energy-saving measures such as solar panels, loft insulation and cavity wall insulation is arguably essential at every level of society if the UK hopes to meet its obligations to cut carbon emissions. As highlighted by the University of Leeds, investing in green technology can pay off in the long-term, whilst providing hope of a better future for subsequent generations.

A family from Barrowford, Lancashire, has described the difficulties faced in securing financial assistance to pay for central heating bills.

Mr and Mrs McDonald-Noble were left with little option but to seek help when their young son, Nathaniel, was diagnosed with Cri du Chat Syndrome, a genetic disorder that causes his body to struggle with even slight changes in temperature.

Severely disabled both mentally and physically, Nathaniel is unable to properly regulate his body temperature, meaning that his parents are forced to keep the family home warm on a constant basis. Whilst most households are learning to use central heating more sparingly in an age of increasing fuel poverty, Mr and Mrs McDonald-Noble have no alternative but to keep the heating up high for 24 hours a day.

Despite help being provided for low-income families, Mr and Mrs McDonald-Noble both work and do not qualify for most means-tested benefits that are made available to other households. The high cost of gas is proving a significant drain on the couple’s resources, however, which is why help has been sought to pay the bills. Unfortunately, help has not been forthcoming to date.

Mr McDonald-Noble explained: “We have to keep the house really warm for [Nathaniel] and winter is an especially difficult time. He gets cold and can turn blue quite easily, just coming out of the bath and things like that.

Since Nathaniel was born our heating bills have doubled. There is help available, but just getting to what’s available is really difficult. The whole system is a minefield with no clarity on what is or isn’t available”.

Pendle Borough Council has promised to look into the possibility of providing a special grant for the McDonald-Noble family, despite the fact that Nathaniel receives Disability Living Allowance. The salient point to note from the couple’s struggle is not only that help from local government and energy companies can be difficult to obtain but that some families cannot afford to save on heating.

Although most households can survive comfortably with reduced reliance on heating, Nathaniel’s parents must do all they can to ensure a warm environment for their son, which could be made more affordable by installing loft and cavity wall insulation to limit heat loss.

Discussing a plight affecting millions of households in England and Wales, Save the Children has claimed that childhood conditions such as Asthma may be caused or made worse by fuel poverty.

According to the charity, 45,280 families in Wales are eligible for the Warm Homes Discount, the UK Government’s latest initiative to increase the affordability of energy for homes throughout Britain. The problem highlighted by Save the Children is that many people do not realise they are eligible for the £120 discount, which was designed to help around 800,000 families.

Save the Children also argues that many families simply do not know how to claim the discount, meaning that the problem of fuel poverty is not being effectively tackled by government.

Head of Save the Children in Wales, James Pritchard, said: “It’s unacceptable that so many of Wales’ poorest families who need help heating their homes this winter will get nothing because energy companies have not put up nearly enough money.

“Without this help the choice for parents is stark: cut back on food, get into debt or risk their children’s health because they can’t afford to keep them warm”.

Mr Pritchard makes a compelling argument, but his concerns are likely to fall on deaf ears as the UK Government continues its drive to cut public spending. Energy companies, meanwhile, despite enjoying record annual profits, are hardly forthcoming in providing sufficient help for the most vulnerable households.

A household is deemed fuel poor if it spends 10 per cent or more of its income on energy. Following another economically turbulent year, millions of households in the UK could be described as fuel poor. If Save the Children is right in its assessment of the situation, fuel poverty could be doing far worse damage to children than previously thought; while proving a financial struggle for many parents, the high cost of electricity and gas central heating could be indirectly ruining the health of thousands of children.

Christine McGourty, the Director of Energy UK, which represents energy firms in the country, argued that the Warm Home Discount scheme had been adequately advertised to customers. Mr Pritchard, however, believes the problem is not one of promotion; instead, he believes the initiative has been “massively underfunded”.

Save the Children has hit out at energy firms, accusing them of not doing enough to help Britain’s most needy families struggling to meet the costs of rising fuel bills. 

According to the charity, energy firms have not committed enough funding to a scheme designed to help fuel poor households, causing thousands of families to miss out on much needed help

Under the Warm Homes Discount Scheme, some of the UK’s poorest families – which according to latest figures stands at around 800,000 – could be entitled to receive a discount of £120 on their home heating bills. However, thanks to a massive shortfall in the amount of funding available, only 25,000 families will actually receive the discount.

The Government scheme, which runs for four years from winter 2011/12, only reaches a mere 3% of families who risk falling into fuel poverty.

“It’s unacceptable that 97% of the UK’s poorest families who need help heating their homes this winter will get nothing because energy companies have not put up nearly enough money,” said Save the Children’s chief executive, Justin Forsyth.

“The scheme urgently needs millions more from the energy companies, or the cost will be counted in children’s futures,” he added.

Electricity suppliers participating in the scheme include the “Big Six”, as well as M&S Energy, Sainsbury’s Energy and Utility Warehouse, amongst others. Each supplier has different eligibility criteria which they use to determine which customers are eligible.

The Warm Home Discount Scheme, which the Government has estimated to be worth £1.1 billion between 2011 to 2015, targets people in receipt of pension credit, as well other vulnerable groups.

Eligible households receive a rebate of £120 in the first year, rising to £130, £135 and £140 towards their annual heating costs as recipients work their way through the four year scheme.

For more information, you can contact the Warm Home Discount Scheme helpline on 0845 603 9439 between 8am to 6pm, Monday to Friday.

People who live in rented accommodation are more likely to be trapped by high energy bills, compared to home owners reports the Citizens Advice. 

Thanks to negligent landlords failing to energy proof their rented  properties by implementing energy efficient home improvements, more and more tenants are living in homes that hemorrhage heat, leading to higher than average energy bills.

Tenants have to rely on landlords to make sure their properties are well insulated, whether it’s by installing double glazing or having cavity wall insulation and loft insulation fitted to keep the heat in.

The Citizens Advice, together with Friends of the Earth are appealing to the Government and private landlords to help tenants manage their rising energy costs, particularly in light of energy providers who have recently increased their energy tariffs across the board.

Energy efficient homes cost tenants hundreds of pounds in unnecessary wasted energy every year. Figures released by the Energy Saving Trust have revealed that some 680,000 private tenants who live in properties with an energy rating of F or G are having to pay out on average £488 annually on wasted energy.

Any property rented out in the UK currently requires an Energy Performance Certificate (EPC), which rates the property’s energy performance from a band A to G. These ratings help potential tenants determine how energy efficient a property is. Come 2018, new rules will come info force which will make it illegal for any landlord to rent out a property that falls below an EPC rating of band E.

Depending on their circumstances, private tenants in rented accommodation may be able to get free or heavily discounted insulation. Tenants will usually need to get written permission from the landlord for the work, but it is a win win situation for both parties. Whilst tenants benefit from a warmer home and a reduction in their energy bills, landlords will see the market value of their property increase.

Fears continue to surround the link between green energy measures and an ‘astronomical’ rise in household energy bills. However, according to a new report from the Government’s climate advisers, renewable energy will not be responsible for adding the huge amounts people seem to think.

In a report out today, the Committee on Climate Change (CCC) has revealed that by the end of the decade household energy bills will increase by £190. But the report has rejected continuing fears that green measures – set to be implemented as part of an overhaul of the UK’s energy system – will see bills sky rocket by astronomical proportions.

According to the analysis by the Government’s official climate change advisers, charges set to be made on future energy bills for energy efficiency schemes and renewable energy generation will contribute around £110 of the increase. However, if would be even less if home owners were to implement a range of energy efficiency home improvements, such as fitting cavity wall insulation and loft insulation. So much so, the Committee has calculated that the rise could be reduced to just £25.

With various reports doing the rounds claiming that financing low carbon investments will cause energy bills to rise by shocking figures - up to £3,000 by 2020; a huge increase up from £1,060 for an average home’s gas and electricity usage in 2010.

“There have been claims that there will be astronomical bill rises in the next decade due to low-carbon policies,” commented chief executive of the CCC, David Kennedy. ”Our analysis disproves this.”

Adding weight to the report, the Grantham Research Institute on Climate Change said some campaign groups had made a “concerted effort to completely mislead the public into believing that green taxes have been the main cause of rises in fuel bills.”

Commenting on the report, a spokesperson for the Department of Energy and Climate Change (DECC) agreed that the CCC’s analysis was correct in terms of past bill increases being primarily due to a rise in the costs of wholesale gas. The CCC found that between 2004 and 2010, electricity and gas bills rose by £455, and that a whopping 84% of this rise was down to the sky rocketing cost of gas on international markets.

An independent body, the Committee on Climate Change advises the Government on issues relating to setting and meeting carbon budgets.

To read the report in full, visit www.theccc.org.uk