Sadiq Khan has launched his own green energy company, claiming it will save the average household £300-a-year on bills.
The mayor of London today unveiled London Power, in conjunction with Octopus Energy, as a part of his Energy for Londoners programme.
The company – which will only be available in London – will act as a non-profit company, with all profit “reinvested into community projects”.
The service will be provided by Octopus Energy and will rely on 100 per cent renewable energy.
Khan said the new energy provider would be within the cheapest 10 per cent of similar tariffs in the market and would save the average household £300 on bills.
“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,” he said.
“For the first time we have a fair, affordable, green energy company specially designed for Londoners.”
London Power enters a market that is already home to 64 active suppliers, according to Ofgem.
The energy market watchdog’s 2019 report on the energy market found 53 per cent of consumers had never switched energy companies.
However, the figure for London – where energy prices are among the most expensive in the country – is not known.
Peter Earl, head of energy at Compare the Market, said he welcomed the extra competitio, but that it may be difficult to attract new customers.
“It’s an industry challenge to activate the large section of people who have never changed their energy company,” he said.
“[Khan’s] got an offering that should be attractive to people, but it’s not going to be easy.”
The formation of London Power won plaudits from green energy advocacy groups the Renewable Energy Agency (REA) and National Energy Action.
REA chief executive Nina Skorupska said: “By adopting this model, City Hall has shown themselves to be one of the pioneers in the move towards a Net Zero UK.”
Caroline Russell, Green Party leader in the London Assembly, on the other hand said Khan’s plans did not go far enough.
She said the mayor should have set up the company without the help of Octopus Energy so City Hall could have greater power over the company’s energy resources.
“I’ve argued with him to set up a fully-licensed company – which means wholly owned byLondon – to get the best benefits for Londoners,” she said.
“The mayor seems cautious that there will be any profits to be reinvested, but a company owned and run by the Mayor would be able to support investment in green technologies and create green jobs.