ENERGY suppliers could pull their cheapest deals after wholesale electricity prices jumped on a warning by EDF about its nuclear reactors.
On Thursday, the French energy giant said that four of its reactors, which supply about 4% of Britain’s electricity, may remain offline for the rest of the year. The news pushed up wholesale electricity prices almost 4% as suppliers scrambled to buy energy for delivery to homes for the final three months of this year, according to energy analyst Icis. Wholesale gas prices rose about 1.5%.
Experts say the jump could force small suppliers, which typically offer the lowest tariffs and have the slimmest profit margins, to pull deals. Wholesale costs account for about 45% of a bill.
Joe Malinowski of comparison service theenergyshop.com said: “If we have a severe winter, the lack of electricity generation could push up wholesale prices further and add pressure on suppliers to pull the cheapest deals.”
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Tens of thousands of households will move from fixed to variable tariffs this month as they come to the end of a fixed deal. By snapping up the cheapest deals they could save about £300 over a year.
Households are already rushing to take advantage of low rates offered by small suppliers. The comparison site Go Compare said 70% of its customers who switched over the past six months opted for “challenger” brands such as Extra Energy, First Utility and Ovo Energy.