Energy switching still ‘dismally low’
Numbers fall... as seventh supplier this year collapses
CONSUMERS switched energy providers in greater numbers a decade ago than they do now, despite industry claims that it has never been more competitive, research shows.
According to auto-switching service LookAfterMyBills.com, 9.26 million people changed provider in 2017, compared with 9.58million in 2008. Additionally, it estimates that the number of people switching suppliers will be around 6million this year, which would be the first fall in numbers since 2015.
According to figures from industry trade group Energy UK, 630,000 people switched provider in October, taking the total for the year so far up to 4.9 million. It prompted Energy UK chief executive Lawrence Slade to say that he was encouraged to see more people making a move.
However, Look After My Bills head of research Lily Green said that given that most households do not switch providers and that switching figures are lower than they were a decade ago, more needs to be done to get people more engaged with energy costs and looking for cheaper suppliers.
“It is counter-productive,” she said, “to over-emphasise record switching numbers when in reality, little has changed.
“The number of people switching is still dismally low and not something we should be getting excited about. Hunting for the best deal on a comparison site year after year is far from common practice.”
On Friday challenger supplier Spark Energy failed, taking the number of providers that have collapsed this year to seven. KPMG was appointed as administrator to the firm.
Spark’s failure has forced regulator Ofgem to step in and it is looking for an alternative supplier to take on the firm’s 290,000 customers under its “supplier of last resort” regime.
This year Ofgem has had to find new suppliers to 515,500 households and 21,080 businesses due to the failure of their providers, the worst year since the last resort scheme was introduced in November 2016. Then, Ofgem had to transfer 160,000 people to a new supplier after GB Energy failed.
The other groups that have failed this year are Future, National Gas & Power, Iresa, Gen4U, Usio and Extra.
Friday also saw the National Audit Office attack the Government over its roll-out of smart meters, claiming that the costs of installing them would exceed official estimates of £11 billion and the programme would miss its 2020 installation target date.
Experts blame the Government’s decision to put the Big Six energy companies in charge of installation, rather than the distribution network operators who run and maintain the infrastructure that connects the National Grid to homes and businesses, for the delays.
Guy Thompson, product director at comparison service MyUtilityGenius.co.uk, said: “The Government got the wrong people to roll out smart meters. Rather than have the distribution companies do it, who could have done it efficiently and easily, they got the suppliers to do it. It has been a logistical nightmare, no one would choose to roll out major infrastructure changes this way.”