Green energy Regulator threatens power firms

Suppliers should make it easier for customers to sell them any surplus electricity from so-called microgeneration, according to the watchdog. Such sales would increase the financial incentive for people to install wind turbines and solar panels.

The warning comes as Alastair Darling, the Trade and Industry Secretary, launches a consultation document on measures and incentives to ensure that renewable energy sources meet the aim of providing 20 per cent of electricity needs by 2020.

He will perform the official ground-breaking ceremony at one of the renewable projects, a pounds 300m Scottish Power investment to build Europe's biggest onshore wind farm south of Glasgow. The 140 turbines will produce enough electricity to power 200,000 homes.

Ofgem sees its contribution as helping the renewable energy drive. It also wants suppliers to act as a "one-stop shop" for people seeking to install and run such equipment.

Alistair Buchanan, chief executive of Ofgem, said: "Suppliers need to compete against each other to raise their game and address these issues. If they are unable to successfully do that, then new legislation could force us to set prices and terms for the sale of surplus electricity back to the networks."