THE BIG six energy firms are set to face more competition, after independent supplier Ovo Energy launched a new initiative to help community groups to sell energy.
Ovo will provide systems for groups such as local councils or housing associations who want to run a utility business, including billing, trading and power generation, in return for three per cent of the wholesale costs.
“Change is inevitable. More competition is what’s bound to happen and we want to get in there first,” said founder and managing director Stephen Fitzpatrick.
Ovo claims that the new schemes will create cheaper tariffs, due to lower grid costs as the energy is locally generated and lower profit margins traditionally taken by community groups.
It reckons up to 500 new community-based energy suppliers will be created in the UK by 2020.
“Ovo’s initiative is good news for energy consumers and shows that the independent suppliers...are stepping up the competition with the large energy companies,” said energy secretary Ed Davey.