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35/11 14 March 2011
The OFT today formally launched a market study into off-grid energy, following a short consultation on its scope. The study will cover both consumer and competition issues and consider the main energy sources available to the 3.6 million households off the main gas grid in the UK.
The OFT received over 300 submissions on the scope of the study, including from off-grid customers, consumer associations and industry. The high number of submissions reflects widespread concerns about the supply of off-grid energy, particularly with regards to heating oil and liquefied petroleum gas (LPG), with claims of high prices, a lack of transparency, misleading information and barriers to switching.
The study will focus on those people who currently rely on either heating oil or LPG to heat their homes. As part of this, the OFT will look at the market's structure and the choice of suppliers, whether competition is working well for consumers, and contractual terms and fairness in supply agreements. The study will also examine alternative fuel sources, looking for example at the extent to which micro-generation technologies, including those based on renewable energy sources such as solar panels and wind turbines, are or will become effective alternatives to heating oil and LPG.
Mary Starks, OFT Director of Infrastructure, said:
'Around three and a half million households are not connected to the gas grid and we want to investigate whether the markets in alternative sources of domestic energy are working competitively, efficiently and fairly for them and, if not, what improvements can be made.
'The severe cold weather in December brought a raft of complaints about heating oil in particular. Responses to our scoping consultation confirmed that concerns remain. We will now investigate these in more detail and report back before next winter.'
The OFT expects to publish its market study in October 2011. It will be contacting key parties directly during the course of the market study and is also inviting contributions from any interested parties by 27 May 2011. These can be submitted by email to email@example.com, or in writing to:
Off-Grid Energy Market Study Team,
Office of Fair Trading (2nd Floor),
2-6 Salisbury Square,
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