A report from Ofgem criticises an inadequate level of competition in the energy market with 95 percent of the UK’s energy supply currently accounted for by SSE, Scottish Power, Centrica, RWE Npower, E.ON and EDF.
Having found evidence for ‘possible co-ordination’ between the ‘big six’ on the timing and levels of price rises, consumers are potentially paying much higher prices than necessary.
The report highlights the growing public distrust in energy suppliers amid rising profits and recent price hikes which have pushed the average annual dual fuel bill to £1,264.
An 18 month investigation will explore ways to restore confidence in a market which requires over £100bn investment before the end of the decade to upgrade infrastructure and replace ageing generation capacity.
Energy secretary Ed Davey said: “This is tough action based on a detailed, independent expert assessment of the state of competition in Britain’s energy markets – leading to the first ever market reference for the energy markets.
“This is just too important for people to rely on guesses about how to fix the energy markets. If we get it wrong, consumers will pay the price.
“We will give Ofgem and the Competition and Markets Authority whatever support they need to get this done as quickly as possible.”