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Energy consumers could have lost out by £2 billion per year

Research findings contributed to a change in Ofgem policy that ended an energy competition clause that was potentially costing households up to £2 billion a year. This month sees the publication of the first annual competition review into the energy sector.

In September 2009 Ofgem, the regulator of UK electricity and gas markets, imposed a non-discrimination clause on energy retailers, preventing them from charging different prices in different regions. Since privatisation, energy suppliers - who traditionally cover one region ('in-area') - have been able to compete in other regions ('out-of-area'). Ofgem was worried it would not be fair if providers offered cheaper prices out-of-area than in-area.

Since Ofgem had implemented the clause for three years in the first instance, this gave an opportunity for the ESRC-funded academics at the Centre for Competition Policy to carry out research and lodge official submissions ahead of the next review.

Further information is available here.

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