Energy switching update - October 2016
Big 6 energy suppliers offering cut price exclusive energy deals
After a relatively quiet summer, things started to heat up again in September.
In the wholesale markets, gas and electricity prices again started to edge higher as supply was squeezed due to power outages at certain power plants and a drop in LNG deliveries.
Despite rising wholesale prices there was no moment in the Standard Variable tariffs of the Big 6 - for now at least.
The stand out developments of last month were two-fold;
Co-operative Energy's announcement that they would be increasing the price of their Standard variable tariff (Pioneer) by an average £32. This increase came into effect on 1 October 2016 and takes the prices of Co-operative Energy's Standard tariff (Pioneer) well above those of all of the Big 6 energy suppliers. The average user on the Co-operative Energy standard tariff is now paying £49 a year more than customers of the Big 6 on standard tariffs. For a company that came to market to attack the dominance of the Big 6, this wasn't supposed to happen. Co-operative Energy blamed the increase on "a 19% increase in environmental and social obligations costs as well as an increase in electricity and gas wholesale prices." Note (1)
Countering that development was a resurgence from 4 of the Big 6 (EDF Energy, E.ON, npower and SSE) offering cut price deals. The catch? These deals are only available through accredited price comparison websites like TheEnergyShop.com and are further restricted to new customers only.
These deals have taken the fight right back to the smaller energy suppliers and, going into a potentially volatile winter period, it will be interesting to see how, or even if, the new entrants will be able to respond. Co-operative Energy, now a mid-tier supplier, has, at least for now, pulled out of the contest.
Despite the wholesale energy price trend, the price of the cheapest energy deal (2) fell by £18 to £760. Consequently savings from energy switching increased to £344 - up from £325 in the previous month.
Joe Malinowski, founder of award winning energy price comparison website TheEnergyShop.com commented.
"Average savings from energy switching have increased to £344 which is great news for switchers going into the winter period when energy usage is at its highest. While existing loyal customers may feel aggrieved that the cheapest deals are not available to them, it is a reflection of the energy market - loyalty seldom if ever pays."
Joe Malinowski continued;
"Just because you can't get the cheapest deal from your own supplier doesn't mean you have to end up paying £100's over the odds. There are plenty of offers from other energy suppliers to choose from. But make sure you check out energy price comparison sites like TheEnergyShop.com - that is where the best deals are these days."
Joe Malinowski concluded;
"If you are a Co-operative Energy customer you should cut and run. They have no compelling competitive offers and customers on their Standard tariffs can save a spectacular £392 by switching."
Cheapest deal in market as at the first day of the month
Based on Ofgem average usage profile
Excludes tariffs with less than 12 months duration
Excludes tariffs that do not have national coverage
Excludes tariffs where payments are taken in advance of the customer coming on supply
Excludes tariffs in controlled market entry
Published 3 October 2016
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