The UK Energy Market

Rip-off Britain. We’ve all heard the complaints – we have it worse over here, it’s more expensive etc. etc. But is it actually true? And when it comes to energy, are we really paying higher prices than some of our near (and not so near) neighbours?

Here at the comparethemarket.com, we wanted to find out the truth. So we’ve been working with the independent think tank, the Institute for Public Policy Research (IPPR) to look at ways of driving consumer engagement in the energy market through more simplified billing. As part of the research, the IPPR has done an analysis of the energy market in a number of similar countries to see what the UK can learn. The comparison looks at switching levels, smart meter adoption and lessons that can be learnt on engaging consumers in countries such as Australia, France, Germany, Sweden and the state of California. 

The results

The results may surprise you. According to the report, the UK was ranked as having the third and fourth most competitive markets in the EU for electricity and gas respectively (IPA Advisory, 2015) – good news for us in the UK. The scoring was assessed based on a broad range of criteria including market concentration, customer switching and pricing.

In the UK, consumer trust in the energy market is low – although it’s recently risen slowly (Edelman, 2017). The UK electricity and gas markets both score highly for competitiveness but consumer trust is low – a price cap is being considered by Ofgem (acting on government instructions) (Peachey, 2017). It’s therefore even more important to encourage, you, the consumers to participate in the market. The following research draws on experiences from the five other countries mentioned to look at ideas for how this can be achieved.

The report also details some of the key lessons that the UK can take away from each country, and provides some key conclusions and suggested ways in which we can implement them into the UK energy market. Key findings include:

  • Introduce net energy metering to reward consumers for producing green energy from rooftop solar panels – Origin: USA (California)
  • Increase incentives for solar panels
  • Time-of-use tariffs for consumers to take advantage of periods of low demand
  • Personal management solutions to improve individual’s management of their energy

Download the report here

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