Ofgem will force generators to publish the prices at which they are willing buy and sell contracts for electricity for two years ahead, and will penalise those who do not trade fairly.
The big six suppliers – Centrica, SSE, RWE npower, ScottishPower, E.On and EDF Energy – will be prevented from refusing any “reasonable” requests from small suppliers to buy electricity. The rules will also apply to the largest independent power generators, Drax Power and GDF Suez.
Some small suppliers have complained they have been effectively blocked out of the market.
Richard Hall, energy regulation expert at Consumer Futures, described the moves as “necessary and long overdue”, pointing out that Ofgem had acknowledged liquidity to be a problem in 2005 and had been “working to tackle it ‘urgently’ – its words – since 2008”.
However, large suppliers such as Centrica have argued that more rules are unnecessary and would add unnecessary costs.
Ofgem outlines proposals to 'break stranglehold' of big six energy suppliers on electricity market