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Big Six feel the heat

Big Six energy companies feel the heat

Over the weekend Npower announced that it was shedding 2,500 jobs in the UK after posting a £48 million loss for the first nine months of last year.  Yesterday E.On posted a 7 million euro loss.  And there are signs that the other four big energy suppliers – EDF, SSE, British Gas and Scottish Power – are under increasing pressure as customers switch to the smaller, independent suppliers.

At face value, this looks like good news as competition forces prices down.  But we face two key problems.  First, if – as the Big Six claim – it is impossible to remain profitable in the current market, can the smaller players take up the slack?  Or will they too face profitability issues if they are obliged to operate at scale?

Second, and ultimately more troubling, what are the knock-on effects for electricity generation, investment in new capacity and maintenance of the existing infrastructure?

We are already witnessing serious problems with George Osborne’s legacy monument in North Somerset, where investment is not forthcoming even when prices have been set at double those today.  If similar investment problems begin to affect the government’s proposed fleet of new gas-fired power stations, Britain could well become the first country in Europe to go entirely carbon-free… and not in a good way!

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