Since the start of the year, consumers in the UK have been repeatedly attacked by energy companies driving up their prices. This latest series of price hikes serves to underline the clearly oligarchical practices of a remarkably stagnant and self-serving industry that is leaving consumers out in the cold. Something within the entire market is clearly broken. Market competition is failing to weed out those companies who take consumer confidence for granted, and governments are failing to take action against the companies that have the market effectively monopolised.

British Gas recently raised prices by 5.5 per cent — on top of a 12.5 per cent rise which they imposed in September 2017. Rising wholesale costs have been the main factor blamed, by British Gas and their competitors for this new round of price increases. However, several factors are also at play here — and we mustn’t allow the big six energy companies to casually explain away how they are adding to the bills of millions of families around the country. The root cause of these rocketing prices lies with the energy companies’ lack of innovation and self-serving practices — alongside governmental policy that does little but buttress those who already hold power in the market.

Obviously fossil fuels are a highly flawed supply of energy — given their price fluctuations and given what we now know of how they harm our environment. However, the Big Six energy companies still lag far behind what we ought to expect of them when it comes to supplying renewable energy, primarily because in the current market they are incentivised to sell as much energy as they can, at as high a price as they can.

The entrenchment of this system has resulted in a dearth of innovative thinking within these organisations. Not only are they solely concerned with their profit margins, but the very nature of large corporate entities means that they are incapable of moving with the agility and versatility that comes from a start-up. So thankfully, to that end there is a multitude of viable options that are being explored outside of the remit of traditional energy companies that could have a monumental impact on the energy market and on the lives of consumers.

For instance, the idea of localised energy production and trading is one that hands power back to consumers and has the potential to harness market forces to give consumers a fair deal. This idea is not new, it has long been held back simply by the fact that small scale energy production was not viable. Now however, renewable energy sources have completely upended this established understanding, and the idea has been given a new lease of life with the integration of new tech such as blockchain and AI.

Technology has now reached a point where the creation of a decentralised network for energy exchange can be integrated on the blockchain. This allows for the creation of a broader energy marketplace that can facilitate the peer-to-peer energy transactions over more than just a localised exchange. Artificial intelligence could be employed to algorithmically provide the best deal for both the small scale energy produces and individuals purchasing this power. Consumers would therefore be given an alternative to the costly energy of the Big Six and would be able to make decisions about their energy consumption that would benefit both their wallets and their consciences. Blockchain and AI can now secure a marketplace that would be equally as efficient as that provided by the traditional energy suppliers, without the incentivisation to charge the maximum price.

Ideas as to how to regulate energy have often been toyed with by governments and think tanks — including ideas such as a price cap on energy bills. However, such ideas seldom come to fruition. Furthermore, they hardly solve the core of the problem — the lack of competition acting as an efficient regulator of the profiteering practices of the Big Six. Where legislation has failed, technology is forcing the large energy companies to adapt their business models and fundamental infrastructure so that they are not left behind.

The key here is for governments to legislate in such a way so to unleash the innovation that clearly already exists within the energy sector. For the sooner we can harness the benefits of blockchain and AI to give consumers a fairer deal the better.

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