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London collective energy switching scheme underway

London Big Switch launched as communities club together to fight energy bills.

Ed Davey announces collective switching schemeA new scheme intended to help London residents get the best possible deals from energy suppliers has been launched.

The Big London Energy Switch scheme is a free to participate in and aims to get Londoners a better deal by becoming more aware of the amount of energy they use, which can subsequently help to lower their energy bills.

The scheme uses funding from the Department for Energy and Climate Change’s (DECC’s) Cheaper Energy Together pot and targets the most vulnerable people in society, who face a constant struggle to keep their homes warm yet are often not aware of the ways in which their bills could be lowered.

It is estimated that 325,000 homes across the 17 participating London boroughs are currently in fuel poverty, which occurs when more than ten per cent of household income is being spent on energy bills.

Collective switching

A major aim of the scheme, therefore, is to identify these people and work out how they could potentially benefit from collective switching.

This occurs when people switch their energy tariff following collective negotiation with the gas and electricity companies on their behalf.

Although any consumer has the right to switch gas or electricity supplier, it is often a complex process, so switching companies organise people into groups of around 10,000 in order to approach suppliers and broker the best possible price.

The first major UK collective switch took place in June last year, with 37,000 people achieving an average saving of £223 per year.

Working together

Each of the boroughs involved in the Big London Energy Switch is able to use an equal share of the £686,655 pot provided by the Cheaper Energy Together fund, explained energy secretary Ed Davey. Mr Davey is the MP for Kingston and Surbiton, one of the boroughs taking part in the initiative.

Collective switching has been one of Mr Davey’s key priorities since taking office, and in March last year he wrote to all domestic gas and electricity companies to highlight the importance of their engagement in collective purchasing and switching.

“I’m delighted that so many local authorities up and down the country are working together to use the funding DECC has offered to help residents get the best possible price for their gas and electricity,” he explained.

“The Big London Energy Switch is an excellent example of the London boroughs working together to secure a better, more affordable price – especially for those people who are feeling the pinch and worried about turning their heating on.”

Keeping homes warm

Mr Davey was present yesterday at Kingston Council’s Guildhall for the official launch of the South West London sub-regional group of the Big London Energy Switch scheme, where he was joined by Kingston Council leader Councillor Derek Osbourne and council leaders, councillors, community groups and third sector groups from the boroughs of Kingston, Richmond, Merton, Sutton, Croydon and Lambeth.

Mr Osbourne said that rising energy bills mean it is important to help people get the cheapest possible energy deals and improve their overall home energy efficiency.

“Councils across the capital will do all that they can to help people, particularly the vulnerable and those on low incomes, keep warm at home,” he added.

“Switching collectively to one domestic energy provider to get better energy deals can benefit us all as residents.”

The initiative is not limited to London, as local authorities across the UK have launched schemes to help get the best deal for residents.

Last year, councils in Peterborough, Norwich, Cornwall and Oldham all launched similar schemes to help benefit local people, with far more set to be launched in 2013 as the DECC publicises the money available to help residents and boost collective switching across the country.