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Scottish Power tells ministers to back free markets or 'fully regulate' energy

The Governments crackdown on rip-off energy prices and attempts to promote competition in the sector are at risk of backfiring after two of the UKs largest suppliers announced plans to quit the household energy market.
SSE revealed it is in talks with Innogy, the German owner of Npower, about spinning off their retail arms and combining them into a separate company. The move, if successful, would reduce the so-called Big Six energy providers in the UK to just five, in one of the biggest shake-ups of the sector in more than a decade.
The energy industry has been plunged into uncertainty by Theresa Mays vow to cap standard energy tariffs despite warnings the move would undermine free market competition.
SSE, which was previously known as Scottish and Southern Energy, confirmed the plans just days after The Sunday Telegraph revealed that the group wanted to turn its back on supplying gas and power to British homes as threats about political interference in the sector come to a head.
The six largest energy suppliers have been hard hit by the Governments pledge to tackle rising energy bills, re-igniting a war of words between industry and ministers over the unintended dangers of certain policies.
The controversial plan to legislate a price cap for standard energy tariffs could wipe as much as ?1bn in profits from the industry.
Scottish Power tells ministers to back free markets or 'fully regulate' energy

Keith Anderson, Scottish Power boss

Credit:
Chris James
The news came on the same day as Scottish Power boss Keith Anderson issued a stark challenge to government ministers: either back free market competition or fully regulate the energy industry but end the political uncertainty one way or the other. The key question the Government needs to answer is whether they still believe customers benefit most from free market competition, said Mr Anderson.
If they do, any intervention must be designed to increase consumer engagement, which is the biggest thing wrong in this sector. Otherwise, we would urge the Government to opt for a fully regulated market. We need clarity one way or the other.
A new Teutonic Highlander would be our largest domestic power supplier, and second largest for gas. pic.twitter.com/3uCIhBS3kn William Marchant (@richonlyinname) November 7, 2017
The increased political pressure has been a distraction for Perth-based SSE, which is increasingly focused on generating renewable power and operating energy networks across Scotland and in parts of southern England. The retail business makes up just 15pc of its overall profits and delivers relatively low returns on investment, leading industry sources to say the business is more trouble than its worth.
Innogys exit from the retail market is less surprising as Npower has struggled to recover from a botched system upgrade that resulted in customers leaving in droves.
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