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London deputy mayor defends decision to tender for an energy supplier

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Deputy mayor for energy and the environment Shirley Rodrigues claimed working with an existing supply would see benefits delivered to Londoners quicker and with less risk.

London’s deputy mayor for energy and the environment Shirley Rodrigues has defended City Hall’s decision to tender for a supplier to provide for its Energy for Londoners scheme rather than set up its owned licensed company, saying the former would see the benefits get to householders quicker.

London’s recently published environment strategy revealed that a tender would be launched for existing suppliers to take part, rather than mayor Sadiq Khan’s manifesto promise of creating a not-for-profit company using local low carbon energy to supply homes and business across the capital.

This was subsequently branded a “white-label whitewash” by campaigners who say the plans fall short of Khan’s election promise. However, speaking to the London Assembly Environment Committee today, Rodrigues said the new strategy offered a faster route to achieving benefits for Londoners.

She said the original model proposal would take a considerable period to implement, particularly as negotiations and deals would have to be made across all 33 London boroughs. Saying City Hall had “an imperative” to get the benefits of lower cost energy bills to Londoners quicker, working with an existing supplier would achieve quicker results she argued.

Rodrigues also claimed setting up a London low carbon-focussed and fully licensed energy supplier carried considerable risks in comparison to the strategy being implemented. She said a new company would be vulnerable to regulation volatility in the current market while also facing a potential failure to capitalise quickly.

Meanwhile, following a tender route would still allow City Hall to direct the impacts of cheaper bills to Londoners quickly, which would be a feature of the tender process. Rodrigues said her team will be seeking innovative business models with a focus on reaching those in fuel poverty quickly.

This will also not preclude the mayor’s office to explore the process of setting up a low carbon energy supplier in the future.

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The London Assembly Environment Committee grilled Rodrigues for well over 2 hours on the London Environment Strategy.

However, a number of members of the environment committee pushed back against Rodrigues’ defence of her approach. Deputy chair Caroline Russell conceded that there may be more risk but that the potential benefits, or “the prizes”, offered by a fully licensed company independent supplier were huge for those in fuel poverty.

Committee chair Leonie Cooper pointed to the successes of Bristol and Nottingham in setting up their own fully licensed energy companies at the same time that Licence Lite was first proposed under previous mayor Boris Johnson.

While Rodrigues stated that the process would be considerably more complex in a city of London’s size, committee member Shaun Bailey claimed London councils would likely cooperate with the scheme and help to expedite its delivery.

Despite these objections, Rodrigues also revealed that a consultation report on London energy supply would be launched within days, likely offering more clarity on the upcoming energy supply tender.


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