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Centrica questions Ofgem’s profits claim as British Gas half-year takings fall

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The big six energy firms that dominate the UK market will double their profit margins over the next year, Ofgem has said. However, after announcing a slump in half-year profits, British Gas owner Centrica has dismissed this claim.

On Wednesday, the energy market regulator said it expects the leading energy firms to make £106 per dual fuel customer in the next year, up from £53 last year.

The energy giants – whose profits are already under investigation by the Competition and Markets Authority (CMA) – rejected this.

Their position was on Thursday strengthened by newly posted results from British Gas. The firm said its operating profits fell by 26%, down to £265 million, in the first half of 2014. 

Centrica subsequently reported that the average annual British Gas customer bill would be £90 lower this year than in 2013.

Criticising Ofgem, Angela Knight, chief executive of the trade body Energy UK, said, “It cannot be right to publish numbers and estimates which imply profits which turn out not to exist.

“Using estimates that are as inaccurate as these, and which often result in misconceptions and misunderstandings, gets us nowhere.” 

Ofgem responded, “Consumers need a clear explanation from suppliers as to why, when costs are falling, they are not seeing cuts in energy prices as we would expect in a competitive market.” 

Indeed, critics have pointed out that British Gas profits have fallen because of lower demand, caused by a warm winter, rather than lower prices. 

Stephen Murray, energy expert at MoneySuperMarket, said, “While the industry is challenging Ofgem on the accuracy of these estimates, we already know that margins have been increasing year-on-year so it is an upward trend that appears to be continuing. 

“The facts are, prices have been rising sharply over the past few years, while wholesale energy costs have been falling dramatically over several months so margins have increased as a result.” 

Consumer confidence in the big six – British Gas, SSE, E.ON, EDF, Npower and Scottish Power – remains low after each significantly hiked their 2013 winter prices. 

Recent figures from the energy ombudsman show that complaints to energy companies have hit record highs, with figures for 2014 more than double that of 2013. 

Many consumers flocked to smaller energy companies, such as Good Energy, who have seen their profits rise as a result. 

Earlier this week, Ofgem also announced new measures that could reduce household energy bills by around £12 per year from 2015.

The proposed price controls for five electricity network operators would cap their spending on maintenance and upgrades at £17 billion. The costs of maintenance and upgrades currently account for 8% of an average fuel bill.

Photo: Tom Page via Flickr

Further reading:

Up to £3.7m in pay and share incentives for Centrica new boss

Ofgem announces plans to reduce electricity bills through new price controls

Energy complaints reach new record high

Unhappy ‘big six’ customers flock to Good Energy, whose profits see sharp rise

Ofgem calls for wide-ranging competition inquiry into energy market

Energy

7 New Technologies That Could Radically Change Our Energy Consumption

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Energy Consumption
Shutterstock Licensed Photo - By Syda Productions | https://www.shutterstock.com/g/dolgachov

Most of our focus on technological development to lessen our environmental impact has been focused on cleaner, more efficient methods of generating electricity. The cost of solar energy production, for example, is slated to fall more than 75 percent between 2010 and 2020.

This is a massive step forward, and it’s good that engineers and researchers are working for even more advancements in this area. But what about technologies that reduce the amount of energy we demand in the first place?

Though it doesn’t get as much attention in the press, we’re making tremendous progress in this area, too.

New Technologies to Watch

These are some of the top emerging technologies that have the power to reduce our energy demands:

  1. Self-driving cars. Self-driving cars are still in development, but they’re already being hailed as potential ways to eliminate a number of problems on the road, including the epidemic of distracted driving ironically driven by other new technologies. However, even autonomous vehicle proponents often miss the tremendous energy savings that self-driving cars could have on the world. With a fleet of autonomous vehicles at our beck and call, consumers will spend less time driving themselves and more time carpooling, dramatically reducing overall fuel consumption once it’s fully adopted.
  2. Magnetocaloric tech. The magnetocaloric effect isn’t exactly new—it was actually discovered in 1881—but it’s only recently being studied and applied to commercial appliances. Essentially, this technology relies on changing magnetic fields to produce a cooling effect, which could be used in refrigerators and air conditioners to significantly reduce the amount of electricity required.
  3. New types of insulation. Insulation is the best asset we have to keep our homes thermoregulated; they keep cold or warm air in (depending on the season) and keep warm or cold air out (again, depending on the season). New insulation technology has the power to improve this efficiency many times over, decreasing our need for heating and cooling entirely. For example, some new automated sealing technologies can seal gaps between 0.5 inches wide and the width of a human hair.
  4. Better lights. Fluorescent bulbs were a dramatic improvement over incandescent bulbs, and LEDs were a dramatic improvement over fluorescent bulbs—but the improvements may not end there. Scientists are currently researching even better types of light bulbs, and more efficient applications of LEDs while they’re at it.
  5. Better heat pumps. Heat pumps are built to transfer heat from one location to another, and can be used to efficiently manage temperatures—keeping homes warm while requiring less energy expenditure. For example, some heat pumps are built for residential heating and cooling, while others are being used to make more efficient appliances, like dryers.
  6. The internet of things. The internet of things and “smart” devices is another development that can significantly reduce our energy demands. For example, “smart” windows may be able to respond dynamically to changing light conditions to heat or cool the house more efficiently, and “smart” refrigerators may be able to respond dynamically to new conditions. There are several reasons for this improvement. First, smart devices automate things, so it’s easier to control your energy consumption. Second, they track your consumption patterns, so it’s easier to conceptualize your impact. Third, they’re often designed with efficiency in mind from the beginning, reducing energy demands, even without the high-tech interfaces.
  7. Machine learning. Machine learning and artificial intelligence (AI) technologies have the power to improve almost every other item on this list. By studying consumer patterns and recommending new strategies, or automatically controlling certain features, machine learning algorithms have the power to fundamentally change how we use energy in our homes and businesses.

Making the Investment

All technologies need time, money, and consumer acceptance to be developed. Fortunately, a growing number of consumers are becoming enthusiastic about finding new ways to reduce their energy consumption and overall environmental impact. As long as we keep making the investment, our tools to create cleaner energy and demand less energy in the first place should have a massive positive effect on our environment—and even our daily lives.

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Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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