ED MILIBAND’S pledge to freeze energy prices continued to weigh on the UK’s energy giants yesterday, with almost £3bn taken off the value of British suppliers Centrica and SSE.
British Gas-owner Centrica’s value fell by £1.78bn between the Labour leader’s speech on Tuesday afternoon and market close yesterday, while peer SSE lost £1.15bn over the period.
The plan to freeze gas and electricity bills until 2017 if Labour wins the 2015 election was lambasted by the energy industry and business groups.
The UK’s total energy production fell by 9.4 per cent in the second quarter of 2013 compared to last year, according to figures released yesterday, swinging the country’s dependency on imports over the half-way mark – up 9.6 per cent to 51.4 per cent.
“The risk of the ‘lights going out’ is not just rhetoric,” said Bob Ruddiman, partner at Pinsent Masons.
“The debate on consumer energy prices... clearly highlights the critical need for a stable fiscal and regulatory regime to attract investment and provide security of supply.”
There are fears that price caps would discourage much-needed investment in energy infrastructure, forecast to cost £110bn over the next 10 years.
Several of the so-called big six energy firms have already tapped into the publicity around the proposed reforms by offering frozen tariffs between now and 2017. Npower’s advertisement said: “Why wait for Ed? Fix your energy prices now until March 2017”. However, some of these tariffs were actually introduced prior to Miliband’s speech.
Yesterday’s data also showed that switching rates among consumers fell by 17 per cent for electricity and 14 per cent for gas between the second quarter of 2012 and the second quarter of this year.