Consumer backlash over British Gas profits

Parent company set to announce £2.8bn profit increase

The parent company of British Gas has risked fierce consumer backlash following reports that it is set to announce a 15% increase in profits.

Centrica plans to reveal the figures this week, which show the company has made a profits increase of £2.8bn following the British Gas price hike in October 2011. Centrica have tried to justify their profits by releasing a study that shows the company have had a beneficial impact on the UK economy in terms of jobs and tax payments, but that is unlikely to appease consumers who have been hit with rising prices.

Centrica has argued that its practices are good for the country, but that won't wash with consumers

(Image source - Metro)

Richard Lloyd, executive director at consumer champion, Which?, said, ‘At a time when spiralling energy bills are consumers’ top financial worry, people are bound to question whether they’re paying a fair price for their energy when they see big profits announcements from the energy giants. Centrica’s analysis won’t change that view as record-high bills land on millions of doormats in the coming weeks'.

The news will bring the pricing of energy bills into question again, as well the Government’s plans to reduce them. PM David Cameron announced earlier this year that all energy providers will have to simplify their tariffs and make sure consumers are on the cheapest one possible. However, many critics have argued these measures won’t go far enough and consumers will be confused as to which is the cheapest option.

Can Scotland reach their energy targets if they gain independence?

Target of 100% renewable energy may fail without UK help

If Scotland votes to become independent it may result in plans to become totally reliable on renewable energy being scrapped.

This warning comes from academics from four UK universities, who believe that the country won’t be able to fund Alex Salmond’s ambitious plans for 100% of Scotland’s electricity to be generated from renewable energy sources by 2020 if they break away from the UK. Scotland would have to spend billions to fund projects such as offshore wind farms and tidal devices on their own, as they would lose all financial support from the UK government. 

Alex Salmond's plans for a 100% renewable-powered Scotland may have to be put on hold

(Image source - Telegraph)

Academics from universities in Cardiff, Birmingham, Robert Gordan and Queens in Belfast, who worked on the report, titled ‘Delivering Renewable Energy Under Devolution’, believe that this increased cost will result in the target either being postponed to a later date or being scrapped completely. ‘Gaining greater control over energy policy is likely to be an inferior option as far as getting renewables funded is concerned, in comparison with the prospect of achieving a scheme organised by Westminster in which the costs are shared across the UK’, states their report, to be published this week in the journal Political Quarterly. ‘This is because, in practice, funding a significant expansion of Scottish-based off-shore renewables under independence would lead to considerable increases in Scottish electricity prices, something that a Scottish government would find hard to sustain politically’.

For Scotland to meet their energy target requirements, they would have to replace the amount of energy generated from fossil fuels and nuclear power, which is currently 50% of the country’s total energy output. They will also have to deal with the higher costs of developing off-shore wind farms in Scotland, as seas are rougher and deeper, making it harder to build, as well as the fact that off-shore wind farms in England and Wales are cheaper and already more advanced. Also, Scotland will likely lose business from the UK, as the UK will be unlikely to continue to support Scotland’s renewable energy projects with subsidies if they gain independence, as there are cheaper energy alternatives in Ireland.

Britain exporting gas cheaper than it is importing it

Ofgem warns of UK energy security being 'undermined'

There are fears that household bills may continue to be inflated because of the fact that Britain is exporting gas that is fetching lower prices abroad and is importing gas from Qatar that is more expensive.

An analysis by the Guardian, conducted jointly with Greenpeace, revealed these figures, which Ofgem, the energy watchdog, believe may be undermining UK energy security because of this distortion in the market. The analysis examined the gas interconnector between the UK and Belgium; a major part of the country’s gas infrastructure, as it has the capacity to carry a fifth of the UK’s gas in winter. However, the report discovered that on over 40% of the days between December 2011 and October 2012, the gas was being exported to the continent despite the wholesale gas price in the UK being higher. Over this period, it is estimated that Britain exported over 15 times more gas than it imported.

Prices may continued to rise if market distortion isn't resolved, warn Ofgem

(Image source - www.offshoreenergytoday.com)

Analysis on monthly government data from Revenue and Customs showed that the UK was importing large amounts of Qatari gas, despite it costing up to 5% more than gas exported to the continent. Ofgem said ‘It is vital that gas on these links flows in line with market signals, to ensure security of supply for customers. However, initial analysis suggests the links are not always being used efficiently. On behalf of consumers, we are looking at all the evidence to establish the facts’. 

This news is the latest in a series of recent reports looking into the ‘dark and murky world’ (as described by Leila Dean of Greenpeace), of the UK’s gas market. In November, there were suggestions that, following the price hikes by the major energy companies, that gas prices were purposely being manipulated.

Linking offshore wind farms to grid will cost £17bn

Fears that development costs could lead to higher prices for consumers

Plans to link offshore wind farms to the grid may result in higher electricity prices for consumers, it has been warned by a committee of MPs.

The method of bringing power from offshore wind farms, and onshore ones, to land is very complex and has been a major obstacle in the development and expansion of the wind energy industry, as a heavy-duty transmission infrastructure has to be developed, which has left many wind farms waiting for long periods to be connected to the grid.

Currently, a licensing system is in place which allows transmission lines to be constructed by the National Grid and other developers, who are then given a guaranteed income for 20 years; a total cost of £17bn. However, companies can only be fined 10% of their income if they fail to meet obligations, which Margaret Hodge, the chair of the public accounts committee, fears will lead to higher prices for consumers. She said, ‘Not only is it unlikely that this licensing system for bringing electricity from offshore wind farms on to the national grid will deliver any savings for consumers, it could well lead to higher prices. Indeed the terms of the licences appear to have been designed almost entirely to attract investors at the expense of securing a good deal for consumers’.

Offshore wind farms seem to be a good source of energy, but getting to use this energy is costly

(Image source - The Guardian)

Ofgem, the energy regulator, responded to the MPs report by highlighting the fact that it was only able to cover the first four tenders for licences, and added that the competition for these licences had saved customers about £290m. They said: ‘Our objective is to ensure this necessary investment is delivered at a fair price. As with any new market, there are lessons from early transactions. The initial tenders were conducted under interim arrangements. "It has always been Ofgem's intent to refine the tender process to deliver greater efficiencies and further benefits to consumers’.

As has been said before, new forms of energy production will, in the short term, lead to higher bills to cover the costs of implementing these new initiatives, though it is expected that these renewable forms of energy production will lead to cheaper bills in the future. But what do you think? Are you willing to pay more now for cheaper bills later? Let us know your views in the comments below.

Are politicians really that out of touch with the public?

MPs calling for higher wages despite millions struggling with low pay and rising energy bills

Earlier this week, the results of a survey of 100 MPs were released, showing that 69% thought that their annual wage of £65,738 made them ‘under-paid’, with the majority of them suggesting that their wage should be at least £96,740.

Considering the expenses scandals of recent years, and the fact that millions of people are struggling to afford things like food, housing, energy bills and general living costs, the news that MPs think they are hard done by is just astonishing. It’s not just because of things like their second homes, their expenses and questions about how much they actually do (apart from major events, how often is Parliament completely full?), but because of the simple fact that so many ordinary, hard-working people are having to face higher living costs without any wage increases and are being told by these very MPs that they’ll have to just put up with it because of the UK’s economic situation.

Despite millions of people struggling with living costs, MPs also think they have it rough

These opinions aren’t just held by one party however. 47% of Conservative MPs and 39% of Labour MPs felt they were unpaid. Only 9% of Lib Dems held this view, but they thought that the ideal wage for a politician was around £78,000. Dave Prentis, the general secretary of Unison, Britain’s largest public sector trade union, said ‘The idea MPs believe they deserve a 32 per cent increase is living in cloud cuckoo land’.  Matthew Sinclair, of the TaxPayers’ Alliance, agreed, saying, ‘Hiking politicians’ wages at a time of pay freezes, benefit caps and necessary spending cuts would be completely unpalatable to taxpayers.

Some MPs have tried to defend their responses, as one wrote in the anonymous comments of the survey that people have ‘no idea’ of ‘the pressure, breadth of knowledge and social skills that are required to do the job’.  If MPs feel they are unpaid, how do they think they rest of the country feels? Didn’t they think about the reaction of the public to their survey responses? Do MPs seriously believe a family struggling to make ends meet, who are have to face turning off their heating to afford to eat, or a graduate who can’t get a job despite having a first-class degree, would think ‘You’re right, £65,000 isn’t anywhere near enough for a politician’?

A lot of MPs seriously seem to have no idea what everyday life is like for a lot of people in Britain, and the results of this survey just show how out of touch they are with the British public by not seeing the irony of telling people to accept pay freezes, lower wages and higher energy bills whilst demanding higher pay for themselves. 

Parents turn off heating to feed kids

New figures show how fuel poverty is rising

One in four families are having to turn off their heating to afford to feed their children due to rises in energy bills.

A survey conducted by the Energy Bill Revolution campaign has revealed the startling figure, along with others that highlight just how much fuel poverty in the UK is rising. According to the results, 45% of adults are using blankets and extra layers to keep warm, and nearly half of parents are turning the heating off whilst their children are out. Another shocking figure shows that a fifth of parents claim their children have been getting ill more regularly due to living in a colder house.

The cost of heating is starting to get too much for many families

(Image source - Metro)

The survey was aimed at 1000 members of the Netmums website, with 88% of them stating they more concerned with energy bills now than they were last year. Sally Russell, the founder of Netmums, said 'With almost nine in 10 families now rationing energy use due to spiralling prices, this signals a new winter of discontent for British families.'

Fuel poverty is an issue that has started to affect more and more people and is something Home Reheat has regularly discussed, with recent articles looking at how nearly 300,000 homes will be dragged into fuel poverty this winter and how elderly people will be hit the worst. 

Watch your energy usage this Christmas

Three tips on saving on your bills over the festive period

That time of year has come around again. Christmas is just a few days away and will be a time for everyone to forget the troubles of the past year and just enjoy the day with their families. But by indulging at Christmas, many people forget to budget and spend loads of presents, food and also energy bills, leaving them going into January with less money than they were expecting.

So here are a few tips on how to make sure you don’t go overboard with your energy usage this festive season –



1. Go easy with the Christmas lights

Do you really need to light your house up like an airport runway?

(Image source - Telegraph)

Decorations are one of the best parts of Christmas. The day you go into the attic, bring everything down and put up the tree is the day Christmas really begins. Families, especially ones with young children, put up all the decorations they can fit in, and on, their house. But although the mass of lights does look pretty when you look at them, it can cost a bomb in electricity bills when January comes around, especially if you’ve had them up since late November, so think about how many lights you really need up. Also, a lot of people will keep their lights on constantly throughout the day and night. Do you really need your lights on through the night? Your neighbours aren’t going to notice them because they’ll be in bed as well. Turn them off when you aren’t there/awake to enjoy them and save yourself money on your electric bill!



2. Turn off the TV

You've probably seen all the stuff on TV before, so turn it off and just enjoy being with your family

(Image source - Telegraph)

A recent study found out that, on Christmas Day, families will watch on average 8 hours of television. Considering the day consists of opening presents (and building the presents for the kids), and having dinner, that’s a lot of TV. But how many people actually pay much attention to the TV when it’s on, especially when the kids are playing with their new toys and the adults are relaxing with a sherry or glass of wine? For most of the day, the TV is just background noise. Another study found out that you can save £100 a year just by adjusting the settings on your TV. So using that logic turning it off Christmas Day might help you save money, even just a little bit.



3. Wear those Christmas clothes

You got one as a gift, so you may as well it wear it

(Image source - BBC)

For a lot of people, Christmas means getting another year’s supply of socks and jumpers. But how many people wear those new clothes on the actual day? Most people just smile at Grandma and put them to the side. But by simply wearing that jumper and those socks you can stay warm for the day, meaning you can turn down the heating, which means saving money on the energy bill.

These ideas aren’t going to save you hundreds of pounds, but they will help in their own way and will get you thinking about how you can save money on your energy bills.

Fuel poverty set to rise

‘Inadequate’ Government policies blamed for increase in households struggling to pay bills

Christmas will be a difficult time for a lot of families as reports suggest another 300,000 households will be plunged into fuel poverty following recent price rises.

The independent Fuel Poverty Advisory Group has warned that nine million homes could be hit by fuel poverty by 2016 and have blamed the Coalition government for doing very little to ‘soften the blow’ of initiatives such as implementing green measures, which could add nearly £100 to the average energy bill, and getting firms to insulate the roofs of poorer customers’ homes, which will add another £100. With these measures, along with the recent price increases from the major energy companies, the average annual energy bill will be around £1,365.

More and more people are struggling to pay the bills to keep their homes warm

(Image source - The Mirror)

A policy announced by the Government which will limit the amount of tariffs energy companies can have and will force companies to offer customers the cheapest tariff has been criticised, as many believe it will actually cause prices to rise because it will effectively end competition for cheap deals and will stop customers switching tariffs regularly.

It has previously been suggested that nearly 90% of people will ‘ration’ their energy this Christmas in an attempt to save money, with elderly people more likely to do so, and more likely to suffer because of it. This Christmas, it is feared that fuel poverty will be directly responsible for over 2000 ‘excess winter deaths’, with that figure looking increasingly likely to rise as winters get colder and prices get higher.

Winter is coming!

Temperatures set to hit 100-year low

You may have already noticed when you went to work this morning with three layers on and spent 20 minutes trying to defrost the car, but winter is here.

Temperatures have plummeted this week and are set to drop even further throughout December, with temperatures estimated at minus 3C in many places, and even as low as minus 20C in some northern areas. 

As has been in case during the last few winters, there are fears of snow blizzards closing roads and train lines, causing chaos for travellers during the festive period. Experts have also expressed concerns that the torrential rain, that has devastated many areas of Britain this week, will return early next month, hampering recovery efforts of those who have been flooded.

Snow has already hit mountainous areas, and could be on its way to the rest of us

(Image Source - The Daily Mail)

So, with temperatures dropping, now would be the time to crank up the heating. But many people are set to go without heating for extending periods over winter due to the increases in energy bills. If only there was a way to utilise and make the most of all of the heating you pay for…

Luckily, there is!

Our innovative Home Reheater recycles the warm air in your home (particularly the heat trapped in your ceiling as it naturally rises) and recirculates it back down to the rest of the room. This allows you to turn your heating down to a lower temperature and still stay warm, as the entire room will remain at one constant temperature, instead of the ceiling being the warmest, as is currently the case in homes across the country.

So there are three options this winter; turn your heating up and face the costs in the New Year, turn it off and stay horribly cold all Christmas, or invest in a Home Reheater and stay happily warm, whilst reducing your heating bill at the same time. Surely the answer is obvious?

Go to our website now and look at the 16 different designs available to find the one that suits your home. With its simple installation process your product will be up and running and saving you money in no time. And at a cost of just £39.95 it is a cheaper alternative to paying over the odds for heating that you'll only waste as it rises to the ceiling.

So stay warm and get your own back this Christmas with

Why hasn't solar taken off?

Form of renewable energy isn't as popular as it could be

Earlier this week, the chief executive of Desertsec Paul van Son denied his plans for a scheme to produce 15% of Europe’s energy from solar panels in North Africa was in turmoil following the withdrawal of two major investors. Both Siemens and Bosch pulled out of the project, which would see energy produced by solar power in countries such as Tunisia and Morocco relayed to Europe via underwater cables, whilst the Spanish government has backed away from a deal to build the panels. Despite these apparent set-backs, van Son laughed off suggestions the €400 million scheme was in crisis. But does this situation suggest that solar power has still yet to really take off as a form of energy production?

An outline of the Desertsec energy proposal - which may now be in doubt

(Source - The Guardian)

Solar power seems like the ideal form of renewable energy. Even more straightforward than wind power, all you have to do is watch as the sun shines and produces electricity. But despite this seemingly simple process of producing energy, solar has yet to really go mainstream. Whereas wind power is gaining more and more momentum as the answer to the question of how to produce clean, renewable energy, solar power is getting left behind. But why is this? Why haven’t we committed to solar yet?

Cost. Installing solar panels in a home can cost nearly £9000 on average; a price a lot of people aren’t willing to pay, especially as it may also require adjustments or renovations of the roofs of houses, which adds further costs. Many people could have had help covering costs via a grant, but last year the Government cut the Feed-In Tariff (FIT) by over half, meaning people who could have earned money for merely having solar panels (up to £1000 a year in many cases), which would have helped cover the cost of the initial installation, will now earn significantly less. 

Solar power is a great form of renewable energy - but people don't like the cost

(Source - The Guardian)

On top of all this, it has been announced that energy bills will increase to cover the costs of implementing green energy schemes, such as solar power. Any form of price increase is bound to anger consumers and, despite the assurances that using renewable energy will actually decrease prices in the coming years, the new deal has been met with criticism from consumers, MPs and environmental campaigners. 

So with the current negativity surrounding renewable energy in the media – mainly focusing on the cost – it seems that solar power has an even harder task of trying to appeal to people as a realistic alternative to traditional energy production.

Wind farms to give energy bill discounts

'Community tariff' offered to residents living near Good Energy wind farms

A new energy tariff will offer energy discounts to people living near wind farms owned by utilities company Good Energy. 

People who live within two kilometres of a Good Energy wind farm will get a 20% discount on their energy bills, which could save them around £110 a year. The new local electricity tariff will be launched next year and will only apply to the Delabole wind farm in Cornwall to start with (as this is the only farm Good Energy currently owns), but will apply to all new wind farms the company opens in the future. Good Energy expects to develop wind farms that can produce an overall capacity of around 100MW in the UK by 2016. Tariff customers will also receive an annual bonus if the wind turbines overproduce energy.

Turbines at the Delabole wind farm in Cornwall

(Source- This is North Cornwall)

The idea of a local tariff had been talked about for the past two years, according to Good Energy chief executive Juliet Davenport, who sees the idea as part of a bigger plan to ‘bring people closer to their energy source’. Davenport also believes the scheme will help wind farms get backing from people opposed to them because of their visual impact on an area, as they will be getting a ‘share of the benefit’ from the turbines, which would in some way make up for their effect on the landscape.

The new tariff will cover discounts for around 400 homes in Delabole and will cost Good Energy £25,000. Residents in Turriff in Aberdeenshire will also get the benefits of this new tariff as a wind farm is currently being planned there.

Have energy companies been rigging prices?

PM threatens heavy fines for companies found to be manipulating market

David Cameron has called for heavy fines against all energy companies that are found to have rigged gas prices in the UK. 

The Prime Minister’s view comes after the Financial Services Authority announced an investigation into several major power companies that are accused of manipulating the wholesale gas market in Britain. Nick Clegg, deputy prime minister, backs Cameron’s stance, saying that consumers would be ‘rightly dismayed’ if the allegations of price rigging are found to be true.

Many of the companies accused of price rigging increased their prices last month

(Source - The Telegraph)

The FSA launched their investigation after word of ‘unusual trading patterns’ was revealed by whistle-blower Seth Freedman, who worked as price reporter at ICIS Heren, a company who set benchmark prices that wholesale gas contracts are based on. ICIS Heren reported to energy regulator Ofcom concerns about suspect trading on 28th September, which is the date of the end of the gas financial year and therefore an important influence on future gas prices.

This investigation will do little to improve the strained relationship between the energy companies and their consumers, which was already damaged following last month’s gas price hike.

Now is the time to switch!

With energy prices going up, make sure you find the right energy provider for you

Over the last few articles, we have discussed ways to save on energy bills in the home, with one of the main tips being to look at switching energy providers following the recent price hike by the major companies. By doing this, you the consumer can find the company with the best deal for you and can also fix your tariff, which in the long run will save you money.

According to a report in the Telegraph, nearly two-fifths of households are seriously considering doing this, with 49%  of people surveyed stating they were ‘angered’ by the price rises this month. MoneySupermarket found that a third of households were worried they could be pushed to breaking point financially due to the rises, as many people are also dealing with rising prices in food and mortgages. 

With Scottish Power, British Gas and Swalec being just some of the companies who have raised prices, now is the time to think about switching providers to make sure you get a deal that is both affordable and tailored to you. 

Money Saving Expert has a guide that gives you advice on how to calculate your energy needs and usage, and uSwitch is a site that lets you compare energy prices from various companies to find the right one for you.

So stop wasting your money and get your own back with

www.homereheat.com 

£3 a month for energy bills?

Pensioners find ways to drastically cut energy usage but still live happy lifestyle

An elderly couple have truly embraced ‘green’ energy and have found a way to cut their bills to the staggering sum of just £3 a month.

Dan and Jane Fish, who live in a bungalow in the New Forest, have installed a wood burner and solar panels in their home, and are using solar energy to run their electricity, hot water boiler and even their car. The couple also grow their own fruit and vegetables and make the most of everything they own, as they are still using the same crockery they've had for the past 55 years.

The only gas they use is for their stove, which is why they pay so little in bills. The couple’s money-saving quest to become carbon neutral has led to comparisons to hit 70s sitcom The Good Life.

While this lifestyle may be a bit too much for many people, it does show how there is an alternative out there to paying high prices for energy; prices that are getting even higher with the recent hikes by the major companies.

For the full story follow this link to the Daily Mail’s website.

'Blackout Britain' in three years time?

Millions face ‘heat or eat’ choice as EU orders UK power plants to close

Britain will be hit by widespread blackouts in just three years time as a result of new EU regulations. Plans that mean nine coal-powered plants will have to close by 2015 to meet the EU’s green standards will cause Britain’s spare energy capacity to drop to just four percent, according to a report by energy watchdog Ofgem.

If the findings of the report come true, the country may become dependent on unreliable undersea cables that come from France, which could lead to scenes in Britain similar to the energy crisis of the 1970s, where the Conservative Government introduced a three-day week to conserve electricity.

As a result of these regulations, energy prices in the UK will most likely skyrocket if Britain has to rely on imported energy, which will leave more hard-working Britons out of pocket.

(To read the full story go to the Daily Mail.)