Thursday, 28 February 2013

British Gas profits boosted by colder weather ?

British Gas has reported a rise in profits for 2012 after colder weather led to people using more gas.

Profits from its residential energy supply arm rose 11% from a year earlier to £606m. It said gas consumption had risen by 12%.

But there has been some criticism that the company increased its prices in November when profits were rising.

Centrica, which owns British Gas, reported an adjusted operating profit of £2.7bn for 2012, up 14% from 2011.

Centrica chief executive Sam Laidlaw told the BBC that the firm's profit margins per household "actually went down", adding that the company had made just under £50 profit per customer household.

"A 5% margin on the business is the sort of margin we require" to make investments in new sources of energy, he added.

Centrica's dividends to shareholders have risen 6% and the company is also returning £500m to them.

Profits were up 16% to £312m at British Gas' residential services unit, which covers services such as boiler repairs.

Audrey Gallacher, the director of energy at Consumer Focus, said: "Perhaps we should not be surprised to see higher profits after a cold winter and with the prospect of significant investment in our energy infrastructure.

"But this announcement comes after more price rises last year, record numbers in fuel poverty and not long after the energy regulator warned of higher still energy prices for the foreseeable future," she added.

Cheapest tariff

British Gas raised its gas and electricity prices by 6% in November, which Mr Laidlaw stressed was "lower than any of our competitors".

All of the big six energy suppliers raised prices this winter, prompting Prime Minister David Cameron to step in and say he was going to force them to put customers on their cheapest tariffs.

Energy regulator Ofgem provided details of its plan last week, which will also limit the number of tariffs that suppliers can offer and force them to make bills clearer.

full article

Tuesday, 19 February 2013

Energy watchdog Ofgem chief warns of bill rises

Consumers are being warned they face higher energy bills as the UK becomes more reliant on energy imports.

In a speech, Ofgem chief executive Alistair Buchanan will say that falls in Britain's power production capacity are likely to lead to more energy imports and customers paying more.

The energy watchdog predicts power station closures could mean a 10% fall in capacity by April alone.

Mr Buchanan has said the UK needs more gas supplies to fill the shortfall.

His warning comes as older power stations close and renewable energy is still growing.

Mr Buchanan added that it was very important to resolve "leaky homes" and become more energy efficient in order to avoid the approaching "near crisis".

He is stepping down as Ofgem chief executive later this year.

Analysts said there was little chance of the UK running out of gas.

"We must not fear," said Ashton Berkhauer, the deputy chair of Energy Forecaster, which gives companies advice on their energy bills.

"The UK is very well connected. We have a number of different inter-connectors based all around the country as well as huge import facilities."

However, he added that both consumers and businesses "need to make sure they are not using more than they need to".

full article

Monday, 18 February 2013


The simplest and often best way to switch energy bills is to use an online service, which can compare the tariffs on offer for you. The services shows you the tariffs available and how much you could save by switching to each one, it allows you to choose what suits you and can rank suppliers by customer service and price. Switching is quick and easy and can be done online. All you need to do is put your postcode into the box to the right and follow the simple steps. The service is free to use and in a few minutes can tell you whether you can save hundreds of pounds. There's no need to fill out any paperwork or sign a new contract - it does the hard work for you.

Monday, 4 February 2013

The Hidden Costs Of The Green Deal

Anyone wishing to take advantage of the Green Deal to improve the energy efficiency of thier home should be aware of the financial consequences.
The expected financial savings must be equal to or greater than the costs attached to the energy bill, known as “the golden rule” .There has also been doubts cast over whether the central tenet of the scheme - a so-called "Golden Rule" whereby the cost of repayments never outweighs the savings on the bill - will actually be successfully implemented.

The scheme requires an assessment of £150 or more to determine what if any work can be done. The cost of this has been suggested to deter many people. The Government believes Green Deal loans will be repaid at a rate no more than 6.92%.
Further to these charges there will be an initial set up charge followed by a £20 annual fee, failure to repay a Green Deal will lead to disconnection of gas and electricity supplies. Recent surveys have found little awareness among the general public for the Green Deal. The high interest rates and charges of the scheme have been heavily critised.
If the loan is paid off early the entire interest for 25 years is the penalty to pay,this would arise due to the anticipated difficulty in trying to sell your home because any buyers would be put off by the increased fuel bills.
It is not yet entirely clear what kind of legal entity is applied to the Land Registry documentation to properties that have received Green Deal loans, or how the mortgage providers will treat those properties when the property is resold or remortgaged.

'Cheap Energy Club'

A new energy club which promises to keep its members on the cheapest gas and electricity deal by monitoring their tariff could finally shift the market in favour of consumers, according to its founder.

Martin Lewis, the consumer champion behind, said that he hopes that the launch of his newest venture, The Cheap Energy Club (, will encourage households who have been languishing on poor value deals to switch and save hundreds of pounds annually as a result.

The website will monitor users energy tariff to ensure that they are on the cheapest gas and electricity deal according to their usage and will alert members to a more affordable deal. If by switching, an energy customer can save more than a threshold they set – as little as £25 a year – the Cheap Energy Club will then move on to the new tariff and pay you £30 cashback.

“The energy market is broken, competition is failing, consumers are being shafted, and with continued price rises the underlying roar of dissatisfaction is growling louder,” said Mr Lewis.

“Many people are confused, scared or disaffected with the idea of switching energy. For a long time people have said to me ‘can’t you just do it for us?’. Cheap Energy Club is a step closer to us being able to say yes.”

full article

Surveyors warn of Green Deal pitfalls

The Residential Property Surveyors Association has raised concerns over the finance mechanism and the future risks for conveyancers, estate agents and homebuyers, following the Green Deal’s official launch.

RPSA chairman Alan Milstein said: “The Green Deal is a strong concept that could significantly help homeowners and tenants to reduce their energy consumption and as a result, reduce their fuel bills too.

“However, as the first Green Deal finance schemes come into place, our members have voiced a number of concerns about whether a Green Deal loan is actually the most cost-effective route for many consumers, while highlighting a number of risks for the wider property profession.”

Mr Milstein argued that the Green Deal may not be the best route for some homeowners. “With early repayment penalties and the uncertainty surrounding how having a Green Deal loan attached to your property will impact on the future saleability of the property, for many homeowners it may be advisable to look at alternative ways to fund any energy efficiency measures, which they plan to introduce.

full article