London Mayor Sadiq Khan’s plans to establish a new green energy firm have now come to 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 carried out. According to the website, London Power is designed to be affordable, environmentally-friendly, and beneficial for the community.
Profits earned by City Hall in London will be used to fund community projects that combat fuel poverty, and push for a zero-carbon London. Electricity supplied to customers is going to be matched with renewable energy generated from wind farms and solar panels.
Khan cited the imbalanced energy prices Londoners pay as the main driving point behind the move. He stated that around £3.5 billion is being spent on gas and electricity bills per year. Fuel poverty is also rampant in the capital, with over a million people (one in ten London households) failing to meet costs of powering and heating homes properly. That figure is currently the all-time highest on record.
London also has one of the lowest switching rates in the UK. Low energy efficiency, low solar panel and smart meter uptake levels, and a high number of prepayment meter (PPM) customers.
Ofgem statistics show that at some point over the last three years, about 54% of consumers have suffered from being on costly standard variable tariffs (SVTs), which likely caused them to pay higher energy bills.
As a response to these figures, London Power offers a competitively-priced twelve-month fixed deal, considered to be among the cheapest 10% of comparable tariffs in the market today. This plan is thought to add up to around £300 worth of savings over one year for a household with average consumption switching to it. 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. London Power also moves away from the standard industry practice of changing customers to a more expensive deal after the initial term ends. Instead, there will be a roll-over to the cheapest comparable tariff once the initial contract term ends.
More than a thousand Londoners have expressed interest in this initiative spearheaded by the city. The first customers, including Mayor Sadiq Khan himself, have already made the switch to London Power.
This landmark partnership between Octopus Energy and the Mayor of London is part of the ambitious target of decarbonising the capital. It is included in the ‘Energy for Londoners’ programme, wherein the city aims to provide healthy and affordable housing, energy-efficient workplaces, and a supply of local green energy to the capital.
homes, citing the fuel poverty affecting a million households in the city. He believes that London Khan recognises the struggle some Londoners face when it comes to heating and lighting their Power will give more Londoners access to a fairer energy deal – one that will not mislead them and automatically put them on a higher tariff as soon as their initial contract ends.
London Power is styled as a one-of-a-kind energy company, according to Khan. It is the realisation of the commitment he made in his manifesto to give London residents fairly-priced electricity and gas.
Octopus Energy CFO and Co-founder Stuart Jackson expressed how happy he was to form a partnership with Mayor Khan, to establish a planet-friendly power company. He also mentioned City Hall’s initiative to reinvest profits into funding decarbonisation projects – highlighting its importance in 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 feels that City Hall is a guiding light towards the UK’s net-zero target, thanks to their adoption of personalised energy for consumers.