Chief of Europe’s biggest utility provider Innogy raised concerns over investment in energy security infrastructure. The head of the retail and renewable arm of German energy group RWE said that if power companies are not allowed to make profit then they would not be able to invest in the infrastructure required to maintain energy security.
Peter Terium, Head of Innogy, expressed his views that suggest that as the small gas and electricity suppliers are taking a plunge into the energy market by offering lower price rates, the big suppliers are getting a tough competition. The company has an important part of the energy market of the UK and represented the voice of many big energy suppliers.
Innogy has 5 million UK homes and businesses as their customers which get Npower subsidiary.
The head of the company also said the energy companies are under the pressure of keeping the energy prices low, which is the main reason why suppliers do not want to invest in the UK energy infrastructure.
In his statement he said that “Something has to give . . . If none of us make adequate profit, this industry is not going to get the investments it needs, the security it needs, and that’s not a good thing in the long run.” This highlights the stress the energy providers go through when they are compelled to curb the energy bills and the necessity of investment needed to replace coal power stations and nuclear reactors.
Innogy chief’s statement is especially relevant as it came at a time when the Big Six energy suppliers are facing the pressure from the UK government which clearly hinted in its Autumn statement that suppliers are earning more profit than what they have declared. The government also accused the Big Six suppliers of charging higher tariffs by stating that “it was not right that two-thirds of energy customers are stuck on the most expensive tariffs”.
Mr. Terium also spoke on the common belief that more number of smaller suppliers would create healthy competition resulting in cheaper energy prices. He said that smaller suppliers cannot survive the rise in wholesale prices and pointed that the collapse of the GB Energy was due to the financial fragility of the new comers in the energy sector.
He concluded by saying that Innogy would not quit the UK despite all the challenges. His concluding words were “We’re always in for the long haul and we are in the UK too.”
Expressing his views on the matter, Shay Ramani, founder of FreePriceCompare.com said that “Innogy chief’s statement opens a new window of thought which points out the dilemma faced by the big energy suppliers in offering energy at lower prices and still investing in energy security measures. This is a tough task to balance and the issue need to be addressed by looking after a larger picture. It needs a unified approach between the government and the big energy suppliers so that customers get energy at affordable rates as well as suppliers can do their bit by investing in energy security measures. For a concrete solution, energy market needs some stability and wholesale energy prices should either reduce or become steady. Only then there is any scope for resolving the issue of energy security and balancing the energy market.”
To sum up, big energy suppliers display reservation towards investing in the energy security measures.They blame tough competition and lower profits as the main reasons for their resistance.
FreePriceCompare.com is a UK based energy price comparison expert that leads in offering free, impartial and transparent comparison for households and businesses. The company also offers an array of price comparison services for mortgages, insurance, travel, broadband, loans and daily deal providers in the UK. Its aim is to facilitate the customers with good value deals that bring in more savings. To know more about the company check its website freepricecompare.com.