Europe’s top energy policy shambles

Bishop Hill -

Liberum Capital are trying to identify Europe’s most disastrous energy policy moves of recent years. There are lots to choose from (but you knew that). Here’s one of the suggestions:

Retail Market Review (UK) - in response to some (relatively) minor miss-selling incidents, Ofgem effectively banned door step selling by energy supply companies. Unfortunately, door step selling was by far the most effective way to get householders to switch. Since Ofgem’s intervention, churn rates for the big six energy suppliers have collapsed from mid-teen percent to mid-single digit. This has saved the supply companies many £10m’s in costs and is a key reason why supply margins have risen in the past 18 months. It also probably means that around 2m households that would have switched to more suitable tariffs are now sitting on the wrong tariff. So to stop active miss selling to a few thousand consumers, Ofgem have caused the passive miss-selling to millions.

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