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Rising Energy Bills: Effects on Provider and Sector

07 Sep 16:00 by Luke Hatkinson-Kent

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Energy bills can be a fickle thing. Within the last year alone energy prices have been rocketing upwards, and the big companies across the United Kingdom have been announcing a serious hike in their pricessince as far back as February this year. Statistics from 2014 show the ‘big six’ dominating 95% of the sector, leaving little room for competitors to edge in with something new. Now four among them in Centric (British Gas), Npower, SSE and Scottish Power have become examples of unreliability in affordable energy.

Energy bills have been slapped with a hefty price tag that may conceivably rise even further. Additionally, so called fixed energy deals operate as if branded with a ticking clock that counts down to drastic change. Of course, the rise will impact provider and sector both, as costly consequences will begin to stack up.  

 

The Decline of Share Prices

Largely fuelled by doubts and fears, share prices owe a lot to predictions and company forecasts that are backed up by informative figures. The price rise is not a reflection of enhanced service but of crippling weakness, and the share prices will reflect this blow and drop accordingly. A company is as good as its reputation, and it’s something many will consider when moving forward with their spending strategies. Consequently, many consumers themselves will no doubt be looking to abandon the big energy providers given the price increase and their notoriously poor customer service, striking out to discover the best deal.

For example, Centrica owned British Gas have raised their electricity price this month, owing to the rising costs of transporting energy to residential areas as well as delivering government energy policy. British Gas are among the top energy providers in the United Kingdom, and have not increased their prices since late 2013. With rumours of ‘unfair practices’ drifting around the leading figures of the sector, a switch for many is becoming more likely. Stark changes such as these leave many feeling somewhat betrayed; that even the titans of the sector can be breached and battered internally. 

 

 

The Effect on the Green Energy Sector?

Of course, the turmoil among the sectors stars could certainly inspire a second wind for the Green Energy Sector – the underdogs of energy provision. Those in search of new providers will no doubt be frantically browsing the market listings in a desperate search for a better deal. With renewable energy proven to be significantly cheap, this turnaround could plausibly give a more powerful incentive for many to engage with the Green Energy Sector and secure its funding.

With the market adapting to meet the needs of the people, more competition (and thus jobs) will inevitably start to grow. With opportunities amid an energy revolution, what begins as a decline for the leading providers reveals opportunities for a better, if at first smaller, system. Of course, along with openings comes competition, but such would undoubtedly be among the better kind when concerning both low energy costs and environmental betterment. Such a situation would seemingly be a win-win scenario for many, and pave a path to a cleaner and more affordable future.

Luke Hatkinson-Kent worked as a Financial Analyst in London after graduating in Economics from the University of Manchester. 
Taking this experience and mixing in his passion for journalism, Luke has gone on to work for himself, writing Freelance financial news pieces.
He has produced detailed reports on stock market movements as well as financial current affairs articles for a number of high profile online publications. 
You can contact Luke on Luke.HatkinsonKent1@gmail.com.