Latest news with #energycompensation
BBC News
a day ago
- Business
- BBC News
The huge sums energy firms get to NOT provide power
It is 1am on 3 June. A near gale force wind is blasting into Scotland. Great weather for the Moray East and West offshore wind farms, you would have two farms are 13 miles off the north-east coast of Scotland and include some of the biggest wind turbines in the UK, at 257m high. With winds like that they should be operating at maximum capacity, generating what the developer, Ocean Winds, claims is enough power to meet the electricity needs of well over a million they are because if you thought that once an electricity generator - whether it be a wind farm or a gas-powered plant - was connected to the national grid it could seamlessly send its electricity wherever it was needed in the country, you'd be electricity grid was built to deliver power generated by coal and gas plants near the country's major cities and towns, and doesn't always have sufficient capacity in the wires that carry electricity around the country to get the new renewable electricity generated way out in the wild seas and rural this has major consequences. The way the system currently works means a company like Ocean Winds gets what are effectively compensation payments if the system can't take the power its wind turbines are generating and it has to turn down its means Ocean winds was paid £72,000 not to generate power from its wind farms in the Moray Firth during a half-hour period on 3 June because the system was overloaded - one of a number of occasions output was restricted that the same time, 44 miles (70km) east of London, the Grain gas-fired power station on the Thames Estuary was paid £43,000 to provide more like that happen virtually every day. Seagreen, Scotland's largest wind farm, was paid £65 million last year to restrict its output 71% of the time, according to analysis by Octopus Energy. Balancing the grid in this way has already cost the country more than £500 million this year alone, the company's analysis shows. The total could reach almost £8bn a year by 2030, warns the National Electricity System Operator (NESO), the body in charge of the electricity pushing up all our energy bills and calling into question the government's promise that net zero would end up delivering cheaper the government is considering a radical solution: instead of one big, national electricity market, there'll be a number of smaller regional markets, with the government gambling that this could make the system more efficient and deliver cheaper in reality, it's not guaranteed that anyone will get cheaper bills. And even if some people do, many others elsewhere in the country could end up paying more. The proposals have sparked such bitter debate that one senior energy industry executive called it "the most vicious policy fight" he has ever known. He has, he says, "lost friends" over political opponents who claim net zero is an expensive dead end are only too ready to is reported that the Prime Minister has asked to review the details of what some newspapers are calling a "postcode pricing" plan. So is the government really ready to risk the most radical shake-up of the UK electricity market since privatisation 35 years ago? And what will it really mean for our bills? Net zero under attack The Energy Secretary, Ed Miliband, is certainly in a fix. His net zero policy is under attack like never before. The Tories have come out against it, green politicians say it isn't delivering for ordinary people, and even Tony Blair has weighed in against Reform UK has identified the policy as a major Achilles heel for the Labour government. "The next election will be fought on two issues, immigration and net stupid zero," says Reform's deputy leader Richard Tice. "And we are going to win."Poll after poll says cost of living is a much more important for most people, and people often specifically cite concerns about rising energy prices. Miliband sold his aggressive clean energy policies in part on cutting costs. He said that ensuring 95% of the country's electricity comes from low-carbon sources by 2030 would slash the average electricity bill by £ the potential for renewables to deliver lower costs just isn't coming through to consumers. Renewables now generate more than half the country's electricity, but because of the limits to how much electricity can be moved around the system, even on windy days some gas generation is almost always needed to top the system up. And because gas tends to be more expensive, it sets the wholesale price. Could 'zonal' pricing lower bills? Supporters of the government's plan argue that, as long as prices continue to be set at a national level, the hold gas has on the cost of electricity will be hard to break. Less so with regional – or, in the jargon, "zonal" - of Scotland, blessed with vast wind resources but just 5.5 million people. The argument goes that if prices were set locally, it wouldn't be necessary to pay wind farms to be turned down because there wasn't enough capacity in the cables to carry all the electricity into England. On a windy day like 3 June, they would have to sell that spare power to local people instead of into a national market. The theory is prices would fall dramatically – on some days Scottish customers might even get their electricity for free. Other areas with lots of renewable power - such as Yorkshire and the North East, as well as parts of Wales - would stand to benefit too. And, as solar investment increases in Lincolnshire and other parts of the east of England, they could also see prices that cheap power could also transform the economics of industry. Supporters argue that it would attract energy-intensive businesses such as data centres, chemical companies and other manufacturing London and much of the south of England, the price of electricity would sometimes be higher than in the windy north. But supporters say some of the hundreds of millions of pounds the system would save could be used to make sure no one pays more than they do those higher prices could also encourage investors to build new wind farms and solar plants closer to where the demand is. The argument is that would lower prices in the long run and bring another benefit - less electricity would need to be carried around the country, so we would need fewer new pylons, saving everyone money and meaning less clutter in the countryside. "Zonal pricing would make the energy system as a whole dramatically more efficient, slashing this waste and cutting bills for every family and business in the country," argues Greg Jackson, the CEO of Octopus Energy, one of the biggest energy suppliers in the commissioned by the company estimates the savings could top £55 billion by 2050 - which it claims could knock £50 to £100 a year off the average bill. Octopus points out Sweden made the switch to regional pricing in just 18 supporters of regional pricing include NESO, Citizens Advice and the head of the energy regulator, Ofgem. Last week a committee of the House of Lords recommended the country should switch to the system. Energy firms push back There are, however, many businesses involved in building and running renewable energy plants that oppose the move."We're making billions of pounds of investments in renewable power in the UK every year," says Tom Glover, the UK chair of the giant German power company RWE. "I can't go to my board and say let's take a bet on billions of pounds of investment."He's worried changing the way energy is priced could undermine contracts and make revenues more uncertain. And he says it risks undermining the government's big push to switch to green energy. The main cost of wind and solar plants is in the build. It means the price of the energy they produce is very closely tied to the cost of building and, because developers borrow most of the money, that means the interest rates they are we are talking a lot of money. The government is expecting power companies to spend £40bn pounds a year over the next five years on renewable projects in the UK. Glover says even a very small change in interest rates could have dramatic effects on how much renewable infrastructure is built and how much the power from it costs."Those additional costs could quickly overwhelm any of the benefits of regional pricing," says Stephen Woodhouse, an economist with the consultancy firm AFRY, which has studied the impact of regional pricing for the power would come as already high interest rates have combined with rising prices for steel and other materials to push up the cost of renewables. Plans for a huge wind farm off the coast of Yorkshire were cancelled last month because the developer said it no longer made economic sense. And there's another consideration, he says. The National Grid, which owns the pylons, substations and cables that move electricity around the country, is already rolling out a huge investment programme – some £60bn over the next five years - to upgrade the system ready for the new world of clean power. That new infrastructure will mean more capacity to bring electricity from our windy northern coasts down south, and therefore also mean fewer savings from a regional pricing system in the are other arguments too. Critics warn introducing regional pricing could take years, that energy-intensive businesses like British Steel can't just up sticks and move, and that the system will be unfair because some customers will pay more than according to Greg Jackson of Octopus, the power companies and their backers just want to protect their profits. "Unsurprisingly, it's the companies that enjoy attractive returns from this absurd system who are lobbying hard to maintain the status quo," he says. Yet the power companies say Octopus has a vested interest too. It is the UK's biggest energy supplier with some seven million customers, and owns a sophisticated billing system it licenses to other suppliers, so could gain from changes to the way electricity is priced, they the clock is ticking. Whether the government meets its clean power targets will depend on how many new wind farms and solar plants are built. The companies who will build them say they need certainty around the future of the electricity market, so a decision must be taken expected in the next couple of weeks. Over to you, Mr Miliband. BBC InDepth is the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.
The Sun
2 days ago
- Business
- The Sun
How to reclaim over £3,900 ahead of summer from mis-sold car finance to energy bills
GET extra cash in your pocket ahead of summer with our guide to reclaiming cash. You could be in line to get over £2,600 back - and there are some key dates to mark in your diary. 2 Lucy Andrews explains what to do. PRE-PAYMENT METER CLAIM £1,000 Tens of thousands of prepayment meter customers will get compensation and their debts written off by energy suppliers. Ofgem has found that energy suppliers have broken rules when installing prepayment meters to collect debt. Some £18.6 million in compensation will be paid by eight energy suppliers to at least 40,000 customers. They are: Scottish Power, EDF, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity. There is no need to take action - you will be contacted directly by your supplier if you are affected. The amount you could get will vary depending on which rules were broken in your case, ranging from £40 for failures like poor record keeping, to £1,000 if you were forcibly switched. But you should make a complaint now if you think you were treated badly. ENERGY BILLS CLAIM £215 It's normal for customers to build up energy credit during the warmer months, but ask for a refund if you've accrued too much. Consider claiming your money back if you have built up more than two months' worth of bill payments, said comparison site Uswitch. The formula for working out how much to ask back is to look at your credit balance, and minus two months' payments. Energy suppliers are sitting on £3.3 billion of customer's money, while the average customer racked up £215 in surplus credit last year, according to watchdog Ofgem. Each company has its own refund process, so ask yours how to claim. Get an up-to-date meter reading ready, as this will be needed in order for your supplier to process the refund. Claiming credit back is a good idea, otherwise you are losing out on any interest you could make on your cash. Put your refund in a high interest easy access savings account, so you can easily dip back into it when bills go up in the colder months. Atom Bank offers the best rate at 4.75 per cent, according to comparison site Moneyfacts. CAR FINANCE CLAIM £1,100 If you bought a car, van or motorbike on finance between 2008-January 28, 2021, you could be in line for a payout worth £1,100. The Financial Conduct Authority is investigating hidden commissions earned by car dealers who negotiated deals with high interest rates for customers. This week it issued an update on compensation. It said it could be an opt-in or opt-out redress scheme. Opt-in means that you will need to sign up for compensation, so you could miss out if you don't register. Opt-out means you are automatically included, but the downside is that you could have to wait longer for your money. The watchdog has estimated that on average, people paid £1,100 more in interest on a typical £10,000 four-year car finance. The scandal could cost lenders as much as £16 billion, according to the consumer site Which?. You can make a claim now by contacting the lender who you signed the finance agreement with, not the car dealer. Check your paperwork if you don't know how your lender is. You will have to wait for any potential payout. The Supreme Court should decide by next month what the final bill for compensation will be. Then, the FCA will respond in six weeks with a plan of action as to how people can get their payout. 'Consumers should expect compensation early next year,' said Alex Neill from the consumer group Consumer Voice. TAX OVERPAYMENT CLAIM £1,562 IF you are taxed through PAYE, make some important checks to see if you have overpaid. The average tax refund was £1,562 in 2023, according to Rift Refunds. You might be on the wrong tax code if you changed jobs, signed up to employee benefits like a company car, or your HR department has made a mistake. You should have recently received an important slip of paperwork, a P60, from your employer. Check your 'final tax code' on the form. If it's wrong, then you could end up underpaying, or overpaying, tax. The most common tax code is 1257L, which is used for most people with one job. If this code also has W1, M1 or X on the end, you are on an emergency tax code and paying more than you should. If you think you are on the wrong tax code, phone HMRC on 0300 200 3300 for a quick response. If you have overpaid, you will be reimbursed and paid 3.25% interest on top. Depending on your situation, you will either be able to claim a refund online, get a cheque in the post, or the tax will be refunded back to you through your wages. MASTERCARD CLAIM £70 Around 47 million Mastercard customers are in line for a compensation payout of up to £70. Make a claim if you bought anything from a shop or supermarket that accepted Mastercard between 1992 and 2008. The Competition Appeal Tribunal has approved a settlement for Mastercard to pay £200 million to affected customers. It was accused of wrongly slapping fees onto transactions made over a 15-year period. Although retailers paid the fees, shoppers lost out because retailers passed the cost on by hiking prices. You are eligible to make a claim if you bought anything from a shop or supermarket that accepted Mastercard between 1992 and 2008 - even if you didn't use a Mastercard. You can't file a claim yet. An online portal is expected to launch in the next few weeks on the website. Register for updates so you'll be notified when this is live. Payments are expected to be made by the end of this year. The amount you could get will depend on how many people register, although it's estimated each person could get £45 to £70. 2
Sky News
28-05-2025
- Business
- Sky News
Tens of thousands to get compensation over forced prepayment meters
People who had prepayment meters forcibly installed in their homes are in line for compensation of up to £1,000 after energy companies signed up to pay £18.6m in debt cancellation and customer payments. The announcement follows energy regulator Ofgem's review of companies forcibly entering the homes of indebted, vulnerable customers to fit prepay meters to prevent them accruing further arrears. Thousands of people were affected and are to receive the debt write-offs and, in some cases, payments from eight providers: Scottish Power, EDF, Utility Warehouse, Good Energy, TruEnergy and Ecotricity. At least 40,000 customers are due to receive the awards following the completion of one of Ofgem's "most wide-reaching reviews", which included more than 150,000 cases where meters were forcibly and also remotely installed without the billpayers' permission. Energy providers will pay £5.6m in compensation for the involuntary installation and issues like poor record-keeping and data quality. These issues meant customers didn't get the support they needed. A further £13m of energy debt will be cancelled. 2:29 Ofgem had already provided £55m in financial support, such as hardship payments and arrears write-offs to affected consumers. There were only "limited" times - fewer than 1% of cases - when a prepayment meter was fitted under warrant when it wasn't safe or reasonably practicable to do so, the review found, during the assessment period of 1 January 2022 to 31 January 2023. Despite this, Ofgem said "one case is too many". Separate investigations into involuntary installations by British Gas, OVO and Utilita are still ongoing. "This has been one of the most detailed reviews of supplier practices in Ofgem's history," its director general of markets Tim Jarvis said. "Our review also found wider issues with the processes suppliers had in place, which is why we've put in place clearer, tougher rules to protect customers in vulnerable situations. "We know that [prepayment meters] can be an effective tool in helping customers manage their costs and debt. "However, customers must always be treated fairly and compassionately, and we are confident that the changes we have made are a significant step to ensure that happens." The forced installation practice was uncovered by The Times in February 2023. Rules around their fitting have since been enacted by Ofgem. Households have been struggling with high energy costs, which skyrocketed following Russia's invasion of Ukraine. Energy Secretary Ed Miliband said: "The government has campaigned tirelessly on this issue and are pleased to see the level of compensation increase to £18.6m, up from £420,000 under the previous government. "Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem. "This increased compensation package is a good start, and we will be announcing further reforms in the weeks ahead."
The Guardian
28-05-2025
- Business
- The Guardian
Thousands of Britons to receive compensation for prepayment meter force-fittings
Tens of thousands of British households that had prepayment meters force-fitted in their properties are to share more than £18.6m in compensation and debt write-offs on their energy bills. The energy regulator for Great Britain, Ofgem, found that energy companies forced prepayment meters on more than 150,000 homes that were not keeping up with their bills, in one of its most comprehensive compliance reviews. The investigation found that ScottishPower, EDF, Octopus, Utility Warehouse, Good Energy, TruEnergy and Ecotricity had fallen short of the regulator's standards when using this tactic to reclaim unpaid energy debts. The eight energy companies have committed to paying compensation and writing off energy debts for at least 40,000 consumers. However, the compensation payments do not include the customers of British Gas, Utilita or Ovo Energy, which face separate investigations by the energy regulator. Households affected by the scandal, which was first uncovered by the Times, can expect to receive payments starting at £40, rising to £250 or £500, depending on the way they were treated by their energy supplier. Payments of up to £1,000 could be paid to customers who had faced 'inappropriate installation', Ofgem said. Energy companies were found to have forced prepay meters into the homes of customers who were known to be vulnerable, including those with mental illnesses and young children, as the energy cost crisis in 2022 caused many to miss payments on their energy bills. The energy regulator was heavily criticised for failing to halt the forced meter installations, despite repeated warnings from campaign groups and MPs, until after the Times reported in early 2023 that debt agents working for British Gas had ignored signs of vulnerability to fit the meters. Ofgem allowed suppliers to restart forced meter installations less than one year later, although forced fittings in homes with young children and those over the age of 75 remain banned. Ed Miliband, the energy secretary, said: 'Justice is finally being delivered to many of the families, lots of them vulnerable, who were affected by the scandal of energy suppliers wrongly forcibly installing prepayment meters. 'Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Tim Jarvis, a director at Ofgem, said: 'This has been one of the most detailed reviews of supplier practices in Ofgem's history looking at tens of thousands of cases. It has taken time, but our priority has been to put things right for those who weren't treated properly, and ensure we don't see bad practice repeated. 'We have made our expectations clear to suppliers on how those customers who were treated poorly should be compensated. They have, and continue to, work closely and collaboratively with us to make sure their processes are robust and that their customers are properly supported.'
The Independent
28-05-2025
- Business
- The Independent
Thousands of energy customers to receive compensation over prepayment meter force-fitting
Thousands of energy customers who were forced to have prepayment meters installed in their homes are set to receive compensation or have their debts written off, Ofgem has said. Following a review into energy companies forcing vulnerable customers onto prepayment meters, the regulator announced that eight suppliers will provide compensation and support. Scottish Power, EDF, Utility Warehouse, Good Energy, TruEnergy, and Ecotricity have all agreed to the scheme. Ofgem stated that the suppliers have committed to paying additional compensation where it is due, and in some cases, will write off some of the energy debts of customers who had a prepayment meter installed involuntarily between 1 January 2022, and 31 January 2023. The suppliers will pay £5.6 million in compensation to 40,000 customers who had a prepayment meter installed involuntarily during the assessment period, using guidelines set out by Ofgem. This would mean around £140 for each customer. Additionally, the suppliers will write off a further £13 million of debt from customers who had a prepayment meter installed involuntarily during the same period. This action is in addition to the £55 million in financial support already provided directly to affected consumers by suppliers before the review's completion, which included hardship payments and debt write-offs, the regulator added. Customers identified as having had a PPM wrongly installed or where processes were not followed adequately between January 1 2022 and January 31 2023 will be contacted by their suppliers, and do not need to take action. OVO has also confirmed it will pay compensation to customers in line with the guidelines developed by Ofgem. Tim Jarvis, director-general of markets for Ofgem, said: 'This has been one of the most detailed reviews of supplier practices in Ofgem's history, looking at tens of thousands of cases. It has taken time, but our priority has been to put things right for those who weren't treated properly, and ensure we don't see bad practice repeated. 'While the number of cases where a prepayment meter was wrongfully installed is relatively low compared to the total number of PPM customers, one case is one too many. 'Our review also found wider issues with the processes suppliers had in place, which is why we've put in place clearer, tougher rules to protect customers in vulnerable situations, and I'm pleased that from today suppliers will be applying our compensation framework for those customers affected and have also committed to further support such as debt write-off. 'We have made our expectations clear to suppliers on how those customers who were treated poorly should be compensated. They have, and continue to, work closely and collaboratively with us to make sure their processes are robust and that their customers are properly supported. 'We know that PPMs can be an effective tool in helping customers manage their costs and debt. However, customers must always be treated fairly and compassionately, and we are confident that the changes we have made are a significant step to ensure that happens.' Dhara Vyas, chief executive of Energy UK, which represents energy firms, said: 'Suppliers have worked hard to co-operate with this comprehensive review and taken further action to put things right in the cases where a prepayment meter (PPM) shouldn't have been installed – or where there was insufficient support for the customers concerned. 'Suppliers have been working closely with Ofgem to meet the requirements of its review and have signed up to the Code of Practice before they have been able to restart involuntary installations of PPMs and have carried out thorough testing of the new processes. 'Involuntary installations have been a last – but necessary – resort for cases where repeated attempts to address debt with the customer through other means have been unsuccessful. It's bad for customers to fall further and further into arrears, and bad debt ultimately drives up the prices that are paid by all customers. 'Since the pause on installations, customer debt has risen to a record £4 billion, and the industry remains keen to work with Ofgem on the proposed relief scheme to tackle this problem.' The scandal first made headlines two years ago, at the peak of the cost-of-living crisis, when it came to light that energy companies were switching people on to prepayment methods. This was done by entering properties to install a smart meter or remotely changing a smart meter to prepayment mode. The energy regulator subsequently suspended all forced installations and launched a review of the process. It comes weeks after Good Energy was made to pay £150,000 in compensation and redress after it failed to give final bills and refund credit to more than 2,000 prepayment meter customers. Ofgem said 2,284 customers on prepayment meters were affected by an error with Good Energy's billing system between 2014 and October 2023. It meant that prepayment customers who switched to another supplier or ended their contract with Good Energy did not get a final bill within six weeks, as required by the watchdog. Good Energy paid out £150,067 as a result, with the average sum per customer standing at £66. Energy Secretary Ed Miliband said: 'Justice is finally being delivered to many of the families, lots of them vulnerable, who were affected by the scandal of energy suppliers wrongly forcibly installing pre-payment meters. The government has campaigned tirelessly on this issue and are pleased to see the level of compensation increase to £18.6 million, up from £420,000 under the previous government. 'Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem. This increased compensation package is a good start, and we will be announcing further reforms in the weeks ahead as we deliver our Plan for Change.'
