Changing supplier can cut energy bills by €13bn

Pressure from consumers could drive down the cost of energy by €13bn if they took the option of changing supplier, according to Pat Rabbitte, the energy minister.

He was speaking after chairing a meeting of fellow EU ministers.

There is a major push by member states and the EU to improve competitiveness and abolish borders to improve energy security and competition.

EU leaders are due to focus on energy matters at their May summit.

Mr Rabbitte said the completion of the internal energy market was an urgent objective and that the role of consumers, both domestic and business, was essential in the drive for greater efficiency and cost-effectiveness.

Studies show that only one in three consumers compare service offers. Mr Rabbitte said this rate is higher in Ireland, where a significant proportion of people have switched providers.

The third energy market package is regarded as the cornerstone of the integration of the gas and electricity market and includes the unbundling of networks; separating generation, production, and supply; consumer protection issues; and the independence and power of national regulators.

Member states will be obliged to protect vulnerable consumers, provide transparent billing and contractual information, and establish a single point of contact and an alternative dispute resolution mechanism for out-of-court solutions.

Consumers will also have the right to switch from one supplier to another in three weeks without any financial costs.

The European Commission will promote the rollout of smart metering systems allowing consumers to manage their consumption in real time and better control their energy bills.

But completing the internal energy market is fraught with problems, some of which look intractable. Mr Rabbitte said there is 20 months left to the deadline for progressing the energy market and there was a definite commitment to implementing the internal market.

“No one is seeking to suggest there are not serious impediments to achieving that, but in so far as we can design and deal with regulatory aspects we are seeking to do that,” he said.

Following discussions at the meeting, he said some member states have more concerns about security of supply than others and some provision has to be made to ensure back-up.

“There is no member state taking an ideological position on capacity mechanisms, but because of this concern a number of colleagues underpinned this aspect. Some made the point that it should be done on a pan-European basis,” Mr Rabbitte said.

The director general of the Energy department in the commission, Philip Lowe, said the process of integration of electricity was gathering speed, with networks in 17 countries now linked. But the gas market was proving to be a more complex issue.