Ofgem has announced new proposals to break the stranglehold of the UK's Big Six energy suppliers on the electricity market and impose fines if these firms do not conduct fair trade with smaller companies.
As per the proposals, the Big Six suppliers would have to post the prices at which they buy and sell electricity on power trading platforms up to two years in advance.
The energy regulator said it wants to create a more level playing field to allow independent suppliers to compete effectively with the Big Six, which include British Gas Centrica, EDF Energy, E.ON, RWE Npower, Scottish Power, and SSE.
The proposals will also apply to Drax Power and GDF Suez Energy UK.
Ofgem senior partner for markets Andrew Wright said: "Our aim is to improve consumer confidence and choice by putting strong pressure on prices through increased competition in the energy market.
"Ofgem's proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers, who will get a fair deal when they want to buy and sell power up to two years ahead," Wright added.
UK Secretary of State for Energy and Climate Change Edward Davey said Ofgem's proposals to increase transparency in the way electricity is traded will give independent generators a foothold in the UK energy market and encourage new players to invest.
"I encourage companies to work with Ofgem to implement these proposals as swiftly as possible. Government stands ready to use the Energy Bill to take necessary measures to improve energy market liquidity should Ofgem's proposals be delayed or frustrated," Davey added.
Energy UK CEO Angela Knight responded to the news: "The Ofgem proposals are not just a 'big six' issue but apply to how the eight largest generators sell their energy onto the wholesale market.
"We need to consider carefully how the proposals join up as some have the potential to increase costs while others may well make it easier to see what is happening in the market."
The UK government said earlier this month that it will implement a European Union (EU) Regulation to empower Ofgem to tackle energy market abuse.
Image: Ofgem said it wanted to create a more level playing field for independent suppliers to compete effectively with the Big Six suppliers. Photo: Courtesy of FreeDigitalPhotos.net.