Sadiq Khan’s venture into energy provision has made losses approaching £1m in its first year, amid questions over local authorities’ role in the market. The Labour mayor set up London Power at the start of last year in an effort to tackle the “disgrace” of fuel poverty. It is run by Octopus Energy based on tariffs agreed with the Greater London Authority (GLA), which says it now serves 5,000 households who save on average £209 per year. London Power, which manages the contract with Octopus, last week posted an annual loss of £880,000 for the year ending March 2020, reflecting the costs of launching and setting up the brand. The GLA plans to spend £3.2m on it overall. Octopus pays a commission to London Power for the customers, which amounted to £29,000 for the three months from January to March 2020. City Hall is the latest Labour-run authority to venture into the energy market, often with dismal results, although its white-label approach differs from others. Councils have entered the market to try to tackle fuel poverty and high tariffs. But costs are high and margins are low, with even the large companies struggling. More than 20 suppliers have gone bust in recent years, while giants such as British Gas have lost market share to challengers such as Ovo. Nottingham Council’s Robin Hood Energy, which counted the former Labour leader Jeremy Corbyn among its customers, collapsed in January after failing to turn a profit. Bristol City Council sold its Bristol Energy in June 2020 after investing £35m since June 2015 but also racking up losses.
Telegraph 18th April 2021 read more »