Launch will benefit low income households
New energy supply company pledges 10% cut in fuel bills
The new supply company plans to be selling heat and power to tenants in 200,000 homes across Scotland by 2020.
Our Power Energy, a subsidiary of Our Power Community Benefit Society, has been founded by 35 member organisations including some of Scotland’s largest housing associations, and local authorities.
The company will enter the market at the end of 2015 as an Ofgem licensed supplier of gas and electricity to provide lower cost energy to the tenants and communities of its member organisations.
It expects to save its members up to 10% on their household utility bills compared to standard commercial tariffs.
Over the next five years, this could see up to £11 million of savings for households in some of the most disadvantaged communities across the country.
Our Power, a living wage employer, is backed by £2.5m from the Scottish Government and another £1m from Social Investment Scotland, both in the form of repayable loans.
Our Power hopes to develop renewable energy projects as part of its business for the benefit of local communities.
Social Justice Secretary Alex Neil said: “Fuel poverty is at its highest level in a decade with fuel prices having risen by an inflation-busting seven per cent between 2012 and 2013.
“A recent investigation by the Competition and Markets Authority (CMA) found that millions of energy customers are paying too much for their energy bills.
“That is why the Scottish Government has invested £2.5 million in Our Power. It will be the first independent and fully licensed energy supply company registered as a non-profit distributing organisation owned by its members.
“This ground breaking company will make a real difference to tens of thousands of low income households who are currently disadvantaged in the energy market and struggling to pay their bills.”
Kimberley Stoddart, a tenant of West of Scotland Housing Association, said: “The launch of Our Power is really great news – energy bills are getting more and more expensive and its particularly hard for people on low incomes to make ends meet. I really hope Our Power will be a wakeup call for the big energy companies – by having a not for profit competitor – hopefully they will feel pressure to reduce their prices.”
Alister Steele, chairman of Our Power and managing director of Castle Rock Edinvar, said: “This is a monumental day for Our Power. We are absolutely delighted to have agreed a funding package with Scottish Government and Social Investment Scotland’s Social Growth Fund.
“Our Power can now fully focus on market entry and delivering a utility offer to households disadvantaged most in the energy market.
“Fuel poverty is one of the biggest issues facing society today and Our Power is fully committed to help eradicate it.”
Alastair Davis, chief executive of Social Investment Scotland said: “Fuel poverty is a major issue for many households throughout Scotland. However, by removing profit from the equation, Our Power offers a new way of tackling this problem.
“Over the next five years Our Power will help many disadvantaged families reduce their energy bills and stay warm.”
“We look forward to seeing Social Investment Scotland’s £1 million investment in Our Power make a tangible difference to communities across the country.”
• The number of Scots companies, communities, farms and landowners making their own electricity has risen by more than 50% in the last year.
New figures show 775 organisations have bought generating equipment in a bid to insulate themselves from rising energy costs, cut carbon emissions and sell excess power to the grid.
That’s up from just 509 in 2013, according to a new report by independent energy firm SmartestEnergy.
Iain Robertson, Glasgow-based Head of Generation for SmartestEnergy, said the latest figures highlighted how significant the independent generation sector now was for Scotland.
He said: “That fact that over £1.5m was invested every week last year also demonstrates the resilience of the sector against a backdrop of political uncertainty, changes to renewable subsidies and the fall seen in wholesale power prices.”
An estimated £80.9m was spent developing 267 new wind, hydro, solar and anaerobic digestion projects in 2014, taking the total spend to just over £494m, according to the Energy Entrepreneurs 2015 report.
In total, Scotland now has 775 commercial-scale projects over 50kW capacity now operating outside of the big power companies. They are generating £271m worth of electricity a year, enough to power more than 1.4 million households.
The figures show Scotland continues to punch well above its weight given its size, attracting almost a quarter of total spend in the independent sector to date across Great Britain (£494.1 million).
Stephanie Clark, Policy Manager at industry body Scottish Renewables, said: “This report shows quite clearly that there is a growing willingness to consider renewable technology as a way to fix energy bills rather than exposing a business or community to fluctuations in the wholesale cost of fossil fuel energy supplied from the grid.”
The number of solar sites north of the border almost doubled during the year with 15 new projects taking the total number up to 32, while anaerobic digestion projects, which can turn waste food into electricity, also saw strong growth with five new sites taking total numbers up to 12.
Across Great Britain, the report shows that the total invested in the sector has now risen to almost £2.1bn, with over 4,460 commercial-scale sites of at least 50kW capacity now in operation.
The projects generate an estimated £1.08bn in wholesale energy a year, enough to power 5.7 million homes or meet all of the public sector’s power needs.
Since the first report in 2013, the amount invested in the sector has risen by 75%, project numbers have more than doubled and their share of total UK generation risen by more than 50% to stand at over 7%.