Energy consumers need more information as well as price cuts

Thursday 19th January 2012

In the past week all of the ‘Big Six’ energy suppliers have announced price cuts for either gas or electricity. These cuts, each of around 5%, have been attributed to recent falls in wholesale prices for energy. On the face of it this seems like good news for hard-pressed consumers.

However, uSwitch has responded to these cuts by claiming that these cuts do not compensate consumers fully for the price rises that energy suppliers have introduced over the past few years. uSwitch has been quick to highlight that these recent cuts will not wipe out the average 21% rise in energy prices in 2011.

Indeed, over the longer term analysis shows that energy tariffs have remained well above wholesale energy prices. For instance, the Daily Mail printed figures last week that demonstrated retail electricity prices have been 30-50% higher than wholesale prices since January 2009.

This is clearly a major source of concern for energy consumers, and one that is not likely to be totally satisfied by the cuts announced in the past week. Is it time that consumers start to take matters into their own hands to save on energy costs? Money Supermarket has highlighted that consumers in the UK could save £3.5 billion by shopping around for the best energy deal - much like they would for their food shopping or their mobile phone tariff.

But a critical issue is that consumers do not have nearly enough detailed information about their own energy use in order to make more informed decisions about their energy supplier.

Whereas consumers are provided with a raft of detailed, itemised information relating to their grocery bill or mobile phone, when it comes to energy they are merely presented with a monthly cost and a figure of total energy use. This makes it very difficult for consumers to understand who can really offer them the best deal.

This is why getting the smart meter roll out right is so important. Smart meters have the potential to completely change how consumers interact with their energy suppliers and the data that is available to them on their own energy use.

We must ensure that this potential is unlocked and consumers are empowered with the technology that will transform their energy use. While smart meters themselves will not be installed until 2014, data disaggregation and energy display technologies are available now. Government and energy suppliers must start looking at rolling these devices out to consumers to empower them to make better, more informed energy decisions.

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