POLICIES

International Energy Policies

International Energy Policies

Introduction

In this assignment we will look towards the United Kingdom's government intervention within the energy pricing because it has been observed that a lot of increase has been seen in the EDF & CO, British Gas, that is compatible with the free market principle enshrine in the United Kingdom's energy policy since the 1990's. There are different ways in which the government can affect the market by participating directly (supplier or buyer of services and services and goods) or participating indirectly within the private markets (like subsidy, taxation, regulation or other influence). The government often has an option between market based and traditional instruments approaches and there are many pros and cons linked with the type of intervention by the Government. These interventions can also unintentionally result in benefiting the regulated industry as compared to the wider public, promoting incompetence.

Understanding the relationship

Choices and Competition in the United Kingdom Energy Retail Market

Even though the overall advantages of the competition are visible, but if the competition is not sufficiently regulated it can be capable of causing major consumer loss. In this study we will be looking over the retail market of United Kingdom's Electricity which has experienced various amounts of problems followed by the introduction of choice and competition into the market. In the year 1998-99 the United Kingdom's domestic retail gas and electricity markets were completely open for competition that allowed the customers with a choice to switch between the competing energy suppliers. The beginning of competition was capable of providing the suppliers with incentives at a very low price, in improving their services and increasing the choices of the customers with a great range of payment and tariffs mechanisms the fulfilled the needs of the customers in a better way.

Nevertheless, the understanding of the retail energy liberalisation is also capable of demonstrating the needs of ongoing enforcement and monitoring of the measures for the consumer protection while introducing competition within the newer markets and above all highlighting the risks that a number of customers may experience the difficulties especially during the competition with early stages. For example: right after the introduction of the competition where some of the consumer experienced a variety of problems as different energy suppliers used forceful selling techniques in order to draw the attention to gain new business. Since there were concerns regarding doorstep selling, and the usage of information by the sales agent that mislead the customers related to the potential savings that they could accomplish if they switched from once service to another and they were also switched without knowing their consents. Ofgem, the energy regulator imposed a penalty in the year 2002 of approx £2 million pounds on London for violating the selling regulations. There were many concerns that have been observed regarding increase of choices within the market that is able to benefit the consumers. And because of that researches, were carried by Ofgem that was able to show that 70% of the consumers found that the ...