Consumers told: Club together to buy energy in bulk

 

Nigel Morris
Monday 19 March 2012 01:00
Comments

A major drive to encourage energy users to cut their bills by clubbing together to buy gas and electricity is to be launched this month by the Government.

Residents of villages or local neighbourhoods – or people with similar interests in different parts of the country – would make joint bids to negotiate mass contracts for heat and light.

Ed Davey, the Energy Secretary, is to hold a meeting of consumer groups, including the consumer organisation Which? and Money Supermarket, to discuss ways of making it easier to bring people together to place orders for energy

He also wants to extend the idea wider by encouraging the involvement of such organisations as the Church of England, trade unions, social landlords, the National Trust, the Friends of the Earth and the Women's Institute.

Similar schemes have been successfully launched in Holland, Belgium and Denmark.

Ministers have been dismayed by a recent drop in the number of households switching suppliers in an attempt to get a cheaper tariff – despite sharp rises in energy prices.

They attribute the fall to increasing public mistrust of the hard-sell methods of energy companies trying to win new customers.

They believe trusted third-party organisations shopping around for new deals for thousands of members could give a boost to the concept of "collective purchasing".

Harnessing what Mr Davey has described as the "power of the crowd", the initiative is designed will help to drive down prices for consumers and boost competition in a market dominated by the "Big Six" suppliers.

Mr Davey told the Independent: "Energy is the perfect market for this kind of approach – it could be a very good way of helping consumers.

"People can be put off from switching because of the hassle involved – the number of switchers is going down, not up.

"But a third-party could tackle the practical problems for them, and thus help increase rates of switching.

"The idea of collective switching is very, very exciting. The government's role would be to give it momentum and visibility and to remove any barriers that prevent it from happening."

He praised the Big Switch scheme being run by Which? and the campaign group 38 Degrees. It is aiming to attract as many interested consumers as possible to sing up by March 31. After then energy companies will be invited to bid against each other for their business.

Thousands have also signed up to the "End the Big Six Energy Fix" campaign launched in The Independent last month. Its aim is force companies to share their profits with the needy, lifting more than five million households out of fuel poverty.

Mr Davey also said that moves, in partnership with the regulator Ofgem, to simplify energy tariffs and make bills easier to understand would encourage more consumers to shop around for the best deal.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in