London Mayor Sadiq Khan’s plans to establish a new green energy firm comes into fruition as London Power goes live, providing 100% renewable energy to customers.
The energy company is powered by Octopus Energy, the only Which? approved supplier chosen after a rigorous process of procurement was made. According to the website, London Power is designed to be affordable, environmentally-friendly, and beneficial for the community.
Profits earned by the City Hall will be used to fund community projects that combat fuel poverty and push for a zero-carbon London. Electricity supplied to the customers is going to be matched with renewable energy generated from wind farms and solar panels.
Mr. Khan cited unfair energy prices Londoners pay as the main driving point, saying that around £3.5 billion is being spent on gas and electricity bills per year. In addition, fuel poverty is rampant in the capital, with over a million people (one in ten London households) failing to meet costs of powering and heating homes properly, the all-time highest on record.
London also has one of the lowest switching rates in the UK, low energy efficiency, solar panel, and smart meter levels, and a high number of prepayment meter (PPM) customers.
Ofgem statistics show about 54% of consumers have suffered from costly standard variable tariffs for not less than three years, which likely caused them to pay higher energy bills before.
As a response to these figures, London Power offers a 12-month competitively priced fixed tariff, considered to belong to the cheapest 10% of comparable tariffs in the market today. This plan is thought to accumulate up to £300 worth of savings in a year if a household with average consumption will switch. PPM users are expected to save as much as £160 compared to the big six PPM rate.
Prepayment customers can also avail of a top-up plan said to be within the three cheapest PPM tariffs at only 14% below the current price cap.
There will be no exit fees for customers under either plan. It also moves away from standard industry practice of changing customers to a more expensive tariff after their contract ends. Instead, there will be a roll-over to the cheapest comparable tariff once the contract culminates.
More than a thousand Londoners have expressed interest in this initiative spearheaded by the city. The first customers, including Mayor Khan, has already made the switch to London Power.
This landmark partnership between Octopus Energy and the Mayor is part of the ambitious target of decarbonising London. It is included in the Energy for Londoners programme, wherein the city aims to provide healthy and affordable households, energy-efficient workplaces, and a supply of local green energy to the capital.
Mayor Khan recognises the struggle Londoners meet in heating and lighting their homes, naming the fuel poverty affecting a million households in the city. He deems London Power gives access to Londoners to a fairer energy deal that will not automatically rip them off with a higher tariff as soon as their contract ends.
Designed for Londoners, London Power is dubbed as a one-of-a-kind energy company, according to the Mayor. It is the realisation of the manifesto commitment he made to give the residents fair-priced electricity and gas bills.
Octopus Energy CFO and Co-founder Stuart Jackson expressed his happiness to form a partnership with Mayor Khan to establish a planet-friendly power company. He also mentioned the City Hall’s initiative to reinvest profits to fund decarbonisation projects, highlighting its importance to creating a carbon-neutral London.
Octopus Energy provides its customer service expertise to the partnership.
Renewable Energy Association CEO Nina Skorupska cites London Power as the future of UK energy firms, providing localised 100% renewable energy that is affordable for people. She calls the City Hall as pioneers of the net-zero target for the UK with their adoption of personalised energy for consumers.