Research conducted by Warwick University conlcudes that the market in domestic electricity is still not fully competitive, a full 8 years after it was opened up in 1999.

The study unveiled a large range of prices within geographical areas, with companies which once held a regional monopoly sometimes charging 10% more than new entrants to the market. Customer inertia means that these incumbant utility firms have little incentive to lower their prices, despite deep price cuts offered by rival firms.

Professor Michael Waterson of the university suggests that one option to stimulate competition is to introduce fixed terms for domestic electricity supply contracts, with customers having to either renew or switch supplier at the end of the contract - a situation he compared to the car insurance market.

For its part, the electricity industry responds that competition in the market is alive and well, with around half of households now having switched energy supplier at least once.

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