The electricity will be generated from 100 per cent renewable sources and any profits will be reinvested into community projects.
A green energy company set up by Mayor of London, Sadiq Khan, has been launched in the UK capital.
The electricity will be generated from 100 per cent renewable sources, including solar, wind and water.
Through the London Power joint venture with Octopus Energy, any profits that City Hall makes will be reinvested into community projects related to fuel poverty, tackling the climate emergency and the mayor’s target to make London a zero-carbon city.
Every year, Londoners spend an estimated £3.5bn on gas and electricity household bills and more than one in 10 London households – over a million people – are living in fuel poverty, the highest number since records began. According to the energy regulator, Ofgem, London has one of the lowest levels of switching energy supplier and one of the highest levels of pre-payment meters in the UK.
Khan said: “It is a disgrace that many Londoners pay too much to heat and light their homes, with more than a million living in fuel poverty. That’s why I’ve launched London Power – to give all Londoners access to a better, fairer deal safe in the knowledge that they won’t be automatically switched to a rip-off tariff when their contract ends.
“London Power is a different kind of energy company. For the first time, we have a fair, affordable, green energy company specially designed for Londoners.”
Every year Londoners spend an estimated £3.5bn on gas and electricity household bills and more than one in 10 London households – over a million people – are living in fuel poverty, the highest number since records began.
London Power will offer a 12-month fixed tariff which it said will typically be within the cheapest 10 per cent of similar tariffs available in the market. For pre-payment customers, the my london top-up plan will always be cheaper than the price cap.
There will be no exit fees for either plan, unlike some large suppliers. In addition, when a customer’s contract ends, they will be rolled over onto the cheapest similar rate, rather than an expensive variable tariff.
The Mayor’s Office claims that the average household paying by direct debit could save around £300 a year by switching to London Power, and the average pre-payment customer could save £160.
The partnership with Octopus Energy is part of the Mayor’s Energy for Londoners programme, which aims to make London’s homes “warm, healthy and affordable”, its workplaces more energy-efficient, and to supply the capital with more local clean energy.
More than 1,000 Londoners have so far registered their interest with London Power.
Nina Skorupska, CEO of Renewable Energy Association, said: “London Power embodies the future of energy companies in the UK: localised, affordable and 100 per cent renewable. The interest already shown demonstrates the growing appetite amongst consumers to feel a personalised connection to their energy, knowing where it comes from and who it is benefitting. By adopting this model, City Hall has shown [itself] to be one of the pioneers in the move towards a Net Zero UK.”
The first council-owned energy company in the UK was Robin Hood Energy, owned by Nottingham City Council. Other examples include Southampton’s CitizEn Energy and Bristol’s Bristol Energy.
Last year, a council-owned energy company in Portsmouth was closed before it went into operation at a reported estimated cost of £2.5m, after efforts to find a buyer failed. Following a change in council administration, the venture was deemed too risky.
In Germany, several energy companies are council-owned as part of the ‘Stadtwerke’ movement.
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