Ofgem gives go-ahead for first local energy suppliers

30 January 2015

30 JANUARY 2015: Leading independent energy supplier, OVO Energy, has been granted permission by industry regulator, Ofgem, to launch several additional energy tariffs under its pioneering new programme ‘OVO Communities’.

The ground-breaking OVO Communities initiative aims to bring hundreds of new, independent, local suppliers into the energy market, driving competition, bringing down bills and radically redressing the imbalance of power between energy companies and their customers.

Like all energy retailers, OVO is currently limited to just four customer tariffs. However Ofgem has today announced that OVO has been granted three ‘derogations’ from this rule. This allows the supplier to give four extra tariffs to each of its first three local authority and community group partners. These groups will then be able to choose and set their own local tariffs, ensuring local residents benefit.

Stephen Fitzpatrick, CEO of OVO Energy said: “The energy retail industry is crying out for change and innovation and the regulator’s decision on this shows what is possible. We’re very excited about the launch of these first projects which can now get started.

“We’re looking forward to helping bring bills down for communities across the country. We don’t’ want to be the Big Seventh, this is about giving power back to them.”

Since launching the OVO Communities brand last year, OVO have been in contact with over 300 local organisations from across the UK. The OVO Communities’ partners that will benefit from this decision are Cheshire East Council, Plymouth Energy Community and Community Energy South.

Craig Morley, MD of OVO Communities added: “We have a fast-growing list of existing partnerships (including three councils) now formally confirmed, and we are getting ready to launch their supply businesses. The pipeline is getting longer every week.

“This decision will help ensure more customers get access to more choices and better value, in a way that meets the needs of local people.”


Media contacts:

Jessica Lennard | Head of Corporate Affairs | 07786025652


The derogation will allow OVO to introduce up to four additional tariffs for each of the community partnerships, enabling the same temporary provisions of SLC 31D that apply to suppliers with white labels in the market. For further information please visit https://www.ofgem.gov.uk/licences-codes-and-standards/licences/notices/decision-notices.

Launched in April 2014 by Secretary of State for Energy, Ed Davey MP, OVO Communities is an out-of-the-box tool kit for local groups (including councils, housing associations and community groups) to directly supply energy to local residents.

Expected savings from the Plymouth partnership are approximately £1 million. For Community Energy South, savings of up to £2 million are expected, whilst residents in Cheshire East could save up to £300 each by taking part in their scheme.

OVO will apply the ‘cheapest tariff’ messaging across both brands – OVO Energy and OVO Communities – ensuring customers of both are informed about the availability of a cheaper tariff regardless of which organisation they initially signed up to.

About OVO Energy

OVO Energy, Britain’s 10th fastest-growing private company - is one of the leading independent suppliers in the UK retail market. Since it entered the market in 2009, it’s grown to 430,000 customers and created over 700 jobs.

OVO’s guiding principles are simplicity, transparency and fairness in all of its operations: make the energy industry easier for consumers to understand and make sure prices reflect the actual cost of doing business so customers know they’re getting a good deal.

For more information, please see: www.ovoenergy.com