Alistair Phillips-Davies, chief executive of SSE, said: “Regulators, politicians, customers and SSE all want the same thing: an energy market that not only works for customers, but is also trusted and seen to do so.”
Sam Laidlaw, chief executive of Centrica, stated that a full independent review would demonstrate that the UK energy market is “highly competitive”. He also warned that “a prolonged period of uncertainty could damage investment at a time when Britain’s energy security is being seriously challenged.”
Eon UK chief executive Tony Cocker said: “A full market investigation by the CMA is the only way to restore full public confidence to the energy sector and depoliticise the whole issue.”
EDF Energy chief executive Vincent de Rivaz said: “Our industry should approach the proposed market investigation with an open mind. We must not be defensive.”
“An inquiry won’t restore trust by itself. Earning trust remains the prime responsibility of the energy companies who deal directly with their customers every day. However, the inquiry will be an important opportunity to establish the facts in a wholly transparent way.”
Keith Anderson, chief corporate officer of Scottish Power, said: “It is important that the CMA is now left to get on with its job, free of distraction so that it can conduct a thorough review and produce authoritative answers. It will be equally important not to pre-empt this evidence based process, in order to retain the confidence of investors during the period of the investigation.”
Npower’s chief executive Paul Massara welcomed the referral as a chance to “provide solid, lasting evidence about the state of competition in the energy market today”.
He added: “It’s time that the realities of the energy market were made public. Britain has the 3rd cheapest gas prices in Europe and the 7th cheapest electricity prices, and we have taken steps to get to the facts as to why bills are going up. If there are problems they need to be dealt with, and where the market is operating well this can be acknowledged.”
In a statement, trade association Energy UK stated the industry has “nothing to hide”, adding: “Many allegations have been made, and over such a long period, that the energy industry considers the best way forward is a competition referral.”
Founder of independent supplier Ecotricity, Dale Vince, said: “If the regulator had been doing its job, it wouldn’t have taken 20 years to get to grips with an obvious problem.”
Good Energy chief executive and founder, Juliet Davenport, said: “It is an opportunity to ensure is delivering the right competitive environment which benefits consumers.”
Energy secretary Ed Davey said this was “tough action” and that “this is just too important for people to rely on guesses about how to fix the energy markets. If we get it wrong, consumers will pay the price.”
Caroline Flint, Labour’s shadow energy secretary, said: “Yesterday’s price freeze from SSE showed that a price freeze is possible. Today’s confirmation that the energy market is broken shows that it’s needed for all customers.”
Ann Robinson, director of consumer policy at Uswitch.com, said that with the inquiry expected to take 18 months, “what is clear is that there is no cavalry coming to the rescue anytime soon.”
Gary Smith, GMB national secretary for energy, said: “This will be bad for jobs in the UK, bad for investment and it will do nothing for consumers apart from maybe delay the relentless rise in energy bills until after an election. We are simply storing up much more pain for down the road.”
Which? executive director Richard Lloyd said: “It is make or break time for the energy suppliers, who should not wait to be forced into action but instead start now to put customers first, keep costs as low as possible and trade transparently.”
Frances Warburton, EY economic advisory director, warned that the inquiry is likely to be “painful in the short term” but stated that “in the long term, it could lead to a renewed relationship between consumers and industry based on improved levels of trust.”