Would a probe into the energy market really deter investments and lead to blackouts?

Since Ofgem completed its investigation last week and a probe from the Competitions Authority was called for, some have spoken out on the issue claiming that the move could stall investment and lead to energy blackouts in the short term future. The initial snipe came from Centrica (British Gas) boss Sam Laidlaw which isn't surprising but since then more and more people have questioned the move and how it might affect the short term future of UK energy. So what's all the fuss about? Shouldn't we be happy about the probe?


Energy Secretary, Ed Davey certainly thinks so.  He defended Ofgem's decision today and said that the current investment climate in the energy sector would not leave the country at risk of energy blackouts.  In addition to this he also spoke out on the BBC Sunday Politics show at the weekend, saying that "huge amounts" of companies were ready to invest and pointed to analysis that indicated Britain was one of the most enticing energy investments in the world.  He said Britain was experiencing an "energy renaissance".


Laidlaw and other critics however, said that the probe into the market would deter investors and create an air of 'uncertainty'. He claimed that investment in power plants would suffer and that this lack of funding may lead to the "lights going out" in the short term.  Davey fought back, citing the countless measures that were in place in order to save the country from a blackout.




The Competition and Markets Authority are scheduled to beging a 15 month probe into the energy market after watchdogs, Ofgem, decided that the market was not performing in the public interest.  Davey himself accused British Gas of a market monopoloy just last month and public confidence is at an all time low following excessive price increases by the big six energy companies.  With this in mind, many will welcome the investigation with open arms and look forward to the changes it could bring.  The CMA have the power to break up companies and completely reform the market however they see fit.  This would give way for rising smaller energy companies, giving them a fair stab at the market and giving consumers more choice over where they purchase their energy from.  What we have to remember here, surely, is that energy is commodity that doesn't vary in quality. It's not like say, buying car, where the dealership or vendor could have a direct affect on the quality and performance of your vehicle.  Energy is the same no matter who it's purchased from - so what customers must look at are essentially the value and the service, and the freedom to switch companies to find the right balance for them. This investigation is a solid step forward in making that happen. 




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