Energy watchdog proposes changes
Ofgem wants to protect customers and make companies more financially robust
Energy regulator, Ofgem, has proposed reforms designed to protect customers and ensure energy suppliers are resilient to market shocks.
It comes days after it told 17 British energy suppliers they have to improve how they deal with vulnerable customers, with the watchdog identifying "severe weaknesses" at five firms.
A raft of energy suppliers have collapsed since the start of last year, after being unable to cope with soaring energy prices.
The Government is facing a roughly £6.5 billion bill for the collapse of supplier Bulb alone.
Proposed reforms:
The regulator said today the fresh proposals include introducing capital requirements to ensure suppliers have enough cash to deal with future energy shocks.
It said it will also require suppliers to ring-fence money they need to buy renewable energy and more closely monitor the use of customers' credit balances to stamp out misuse by firms.
Ofgem said it is seeking feedback on the plans and hopes to publish the reforms in the spring.
Chief executive Jonathan Brearley said: "The energy crisis has had a profound impact on the sector, its business models, our approach to its regulation and the way we think about risk.
"These proposals will provide protections, checks and balances for consumers, suppliers and the entire sector to create a more stable market.
"We want suppliers to be able to be innovative and dynamic, while also making sure they are financially stable and that customers' money is protected.
"Ultimately, we have a responsibility as a sector to ensure we are protecting consumers' interests by making sure our financial regulations are as robust as they can be.
"At a time of extremely high energy bills, that responsibility is more important than ever."
Energy-saving tips for your home:
Switch off appliances at the plug
Switching appliances off standby can save you roughly £45 a year according to the Energy Saving Trust.
Most electrical appliances can be turned off at the plug without affecting any programming. You can also get a standby saver or smart plug which allows you to turn all your appliances off standby in one go.
If you need to replace anything, you can cut your electricity bills by choosing the most energy-efficient model.
Keep the heat in
You can lose heat through draughts around doors and windows, gaps around the floor, or through the chimney. Drought proofing your home can save around £25 a year on energy bills. Double glazing is also much better at keeping heat in than single glazing, something to consider if you're replacign your windows.
Insulating both your loft and cavity walls can save you as much as £290 a year. Laying loft insulation to a thickness of 270mm in a typical non-insulated three-bedroom semi could trim £135 a year from energy bills, as less heat will be lost through the roof.
Install and use central heating controls
Having a room thermostat, programmer and thermostatic radiator valves could save a typical home £75 a year.
Smart thermostats mean you can operate your heating remotely via the internet using your mobile phone, tablet or computer. Some can also learn your routine or adjust your settings depending on the weather forecast, meaning you only use what you need.
Smart thermostatic radiator valves, also enables you to control exactly which rooms are heated, and which aren't if they're not regularly used.
Get your boiler serviced or replaced
According to the Energy Savings Trust; condensing gas boilers typically have the lowest running costs to provide heating and hot water. If you currently heat your house using electricity, it's likely your bills are higher than the UK average.
For most households, central heating is responsible for more than half of your energy bill each year, so replacing an old, inefficient gas boiler with a modern energy-efficient one could make a big difference to your payments, although obviously it would cost money to have installed.
Turn off lights if you’re not using them
It's a simple one, but something we can all do - turn your lights off when you're not using them or when you leave a room. This will save you money on your annual energy bills.
LED Lights
Speaking of lights, switching to LED lights can also save you a lot of money. LEDs are the most energy-efficient light bulbs around, and use almost 90% less energy than traditional incandescent bulbs.
An LED light bulb costs around £1.71 a year to run, compared to £8.42 for an old-style halogen bulb. When you add up all the lightbulbs in your house, that can mean some big savings.
Save money on washing
Try to use your washing machine on a 30-degree cycle instead of higher temperatures, particularly if the clothes aren't too dirty. It will save energy heating up the water.
Avoid using a tumble dryer for your clothes: dry clothes on racks inside where possible or outside in warmer weather to save cash.
Also make sure you don't run a half empty washer or dishwasher, only running these appliances when they're full means fewer washes which saves energy and water and of course – money.
Spend less time in the shower
Keeping your shower time to just 4 minutes could save a typical household £70 (£35 in NI) a year on their energy bills according to the Energy Saving Trust (Aug 22)
Be wiser with how you use electricity in your kitchen
Avoid overfilling the kettle to save money on your electricity bill.
You could also consider fitting an aerator onto your existing kitchen tap to reduce the amount of water coming out without affecting how it washes or rinses. An aerator is a small gadget with tiny holes – they attach to the spout of taps and are cheap and easy to install.
And as mentioned before - only run your dishwasher when it is full to reduce the amount of water and electricity you use.