Consumer Perceptions of the Energy Market Q3 2019

Publication date2nd December 2019Information types

  • Charts and data
  • Reports and plans

Policy areas

  • Domestic consumers
  • Electricity – retail markets
  • Gas – retail markets

Related LinksRelated Links

Ofgem in conjunction with Citizens Advice uses a quarterly survey to monitor domestic consumers’ perceptions about the quality of service in the energy market. Ofgem uses this information to support its monitoring and compliance activities.

The survey commenced in Q4 2018. This is the fourth wave of the study, conducted in Q3 2019.

The survey covers a range of topics including satisfaction with energy suppliers, perceptions about energy tariffs, use of price comparison websites and awareness and understanding of the default tariff price cap.  

The survey is conducted by Accent Research on behalf of Ofgem and Citizens Advice. Each quarter we survey approximately 3200 household energy bill payers across Great Britain.

read more here: https://www.ofgem.gov.uk/publications-and-updates/consumer-perceptions-energy-market-q3-2019

Please contact consumer.first@ofgem.gov.uk for further details.


Ofgem publishes 2019 Annual Iteration Process for network price controls

Publication date29th November 2019Information types

  • Press releases

Policy areas

  • Electricity – distribution
  • Electricity – transmission
  • Gas – distribution
  • Gas – transmission

Ofgem has today published the results of the 2019 Annual Iteration Process (AIP) for energy network companies under its network price controls. 

As part of the ‘Revenue = Incentives + Innovation + Outputs’ (RIIO) price controls for network companies, we make annual adjustments to the revenue that we allow the energy network companies to collect through the AIP.

The AIP updates base revenues across Ofgem’s four price controls (electricity distribution, gas distribution, electricity transmission, and gas transmission) for the next regulatory year (2020/21).

This year’s AIP has reduced the allowed revenue that network companies will collect relative to the assumptions made at the start of the price controls by around £965 million (2018/19 Prices), saving consumers money on their bills. This reduction is driven by the following factors:

  • Cost of Debt – Lower interest rates in debt markets have resulted in a lower cost of debt allowance compared to the level set at the start of the price controls.
  • Allowed Expenditure – On the whole, network companies are spending less than the amounts assumed at the start of the price controls, therefore we make a proportionate reduction to their allowed revenue.

We have published updated price control financial models (PCFMs) for the four price controls, here:

RIIO-ET1 Financial Model following the Annual Iteration Process 2019

RIIO-GT1 Financial Model following the Annual Iteration Process 2019

RIIO-GD1 Financial Model following the Annual Iteration Process 2019

RIIO-ED1 Financial Model following the Annual Iteration Process 2019

For media queries contact Ofgem media manager Ruth Somerville 0207 901 7460/ 07766 511 470 ruth.somerville@ofgem.gov.uk 


Npower loses over 260,000 customers in the third quarter of 2019

Big Six energy supplier Npower lost 261,000 customers in the third quarter of 2019, as large providers continue to haemorrhage clients to smaller challenger brands.

The figures take total customer losses for the year for the company, which is owned by German power giant Innogy, to 447,000.

Npower also posted a nine-month operating loss of €167m (£142.1), with expected losses for the whole year expected to hit €250m.

Innogy said that the decline was mainly driven by the introduction of the energy tariff price cap in the UK.

Chairman and chief executive Johannes Teyssen recently described Innogy’s loss-making UK retail operation as “an open wound that is bleeding profusely.”

Npower, which is Innogy’s retail arm, was recently bought by fellow German firm E.on, which warned that it would not tolerate a loss-making business for long.

According to energy market regulator Ofgem, profits at the UK’s six-largest energy suppliers shrunk by over a third last year.

Ofgem’s State of the Market report also found that 40 per cent of all electricity switching between July 2018 and June 2019 came from customers leaving Big Six suppliers in favour of smaller ones.

However, a report earlier this week found that last month 100,000 customers moved from small or medium sized firms to Big Six companies, suggesting the major players may have begun to turn the tide.

Peter Earl, head of energy at comparethemarket.com, said: “The Big Six have snatched the momentum from their smaller and nimbler energy rivals – but whether this is a longer-term trend or merely a blip remains to be seen.”

Innogy slashed its overall outlook on the back of Npower’s performance, saying it now expects retail profit to run between €200m and €300m, a €100m reduction on its previous range.

The news caps off a tough twelve months for the company, which last December was forced to call off a planned merger with SSE’s retail arm, which was subsequently bought by challenger brand Ovo.


Climate change: UK ‘has technology’ for zero carbon

Eliminating greenhouse gas emissions in the UK is achievable with current technology, according to a new report.

The Centre for Alternative Technology (CAT) said a net zero-carbon Britain is already possible, without relying on future developments.

The Powys-based charity said changes to buildings, transport and industry could help slash UK energy demand by 60%.

“We have the technology to combat climate change and we can start today,” said project coordinator Paul Allen.

The CAT report – Zero Carbon Britain: Rising to the Climate Emergency – also claims making further changes to energy, diets and land use could help provide 100% renewable energy and cut emissions from agriculture and industry.

That would mean the UK would not be reliant on “as yet unproven” technologies, such as carbon or air capture, said Machynlleth-based CAT.

Mr Allen said using alternatives to technology that is ready to be rolled out at scale was “not worth the risk”.

However, the UK government described carbon capture as a “game-changing technology” in addressing climate change and said the country’s first project should be operational next year.

Britain was the first major nation to propose cutting greenhouse gas emissions to zero, promising to do so by 2050.

Reducing energy use

CAT said more new houses should be built to high Passivhaus standards that can reduce energy costs to just £15 a year by using insulated masonry and concrete, triple-glazing, LED lighting and air-source heat pumps.

Some of these changes could also be fitted to existing buildings to improve temperature control and potentially reduce heating use by around 50%.

Transport energy demand could also be cut by 78% by increased use of public transport, walking, cycling and using electric vehicles while cutting flights by two-thirds.

Increasing energy supplies

Based on the past decade’s weather and energy use, it is possible to fully match the UK’s entire energy demand with renewable and carbon-neutral energy, the report claims, if CAT’s recommendations are carried out.

Half of that would be provided by wind while other sources suited to the UK climate – including geothermal, hydro, tidal and solar – would produce most of the rest.

Carbon-neutral synthetic fuels are also an important alternative to electricity, especially in some areas of industry and transport.

Transforming land and diets

Switching from meat and dairy to plant-based proteins, reducing food waste and improving agriculture could go a long way to cutting carbon emissions, the report said.

CAT says the UK can:

  • Reduce on-farm greenhouse gas emissions by 57% (compared to 2017)
  • Cut food imports from 42% to 17%
  • Use 75% of current livestock grazing land for restoring forests and peat-lands

“We can still have coffee, chocolate and tea in a zero-carbon Britain, but the UK currently imports many foods that we can easily grow here,” said Mr Allen.

“By changing what we eat and how it’s grown, and by wasting less food, we can reduce greenhouse gas emissions, increase resilience and improve health and wellbeing.”

CAT is urging politicians to come up with action plans with policy frameworks and large-scale investment as a matter of urgency.