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Tuesday 19th
August 2008
French-owned firm EDF Energy have been responding to criticism, as energy
companies in the UK are hitting their customers with double-digit price rises.
A government consumer watchdog has queried the difference in the price
paid by French customers for their electricity against that charged to their UK
counterparts.
The difference in pricing has been estimated in official government figures
as around £110, or 25 per cent of UK bills. It costs an average of
£442 a year for
electricity in the UK
against £332 for those supplied by EDF in France.
EDF says the answer is quite simple, calling into question the UK
government’s continued commitment to nuclear energy, claiming that 80% of French
energy is nuclear based while 75% of UK energy is fossil fuel based.
It is this dependence on fossil fuels in the UK that makes the process and
ultimately the price more susceptible to fossil fuel price increases.
The UK government renewed its commitment to nuclear power in January 2008,
but it will not be until around 2020 that we start to see the extra generating
capacity come online.
How the UK government deal with this discrepancy is an issue, as they want
the UK consumer to get the best deal on one hand, but need EDF's financial
muscle to develop the new nuclear power
in the UK.
EDF was the first leading energy company to announce
price rises for its five million domestic
UK customers, of 22 per cent for gas and 17 per cent for electricity, two weeks
ago.
It was followed last week by British Gas, which
increased prices for gas customers in some regions by as much as 44 per cent.
Scottish Power is expected to announce double-digit price rises for its 5.2
million gas and electricity customers in the coming days.
E.ON, npower and Scottish & Southern Energy (SSE) are also thought to be
preparing further rises to household and business bills in the coming weeks.
We reported this month that the Business and Enterprise Select Committee
ruled out price fixing by the big six suppliers.
Chairman Peter Luff however did state that there were "very real problems in the
energy markets at all levels".
The main problem cited was that the UK market is a comfortable oligopoly
between major companies, where it is too "easy for players to make informed
judgments about the behaviour of their competitors. This alone can distort
competition without any actual collusion occurring".
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Energy see our
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Electricity and
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