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News Regulation Supply

Support increases for Energy for Londoners’ expansion into supply market

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Image: Bill Smith/Flickr.

The London Assembly’s Environment Committee has thrown its support behind plans to expand the capital’s Energy for Londoners (EfL) scheme into a fully licensed, domestic electricity supplier.

One of Sadiq Khan’s key election pledges last year was to establish EfL under his predecessor Boris Johnson’s Licence Lite scheme, enabling it to procure locally-generated electricity and re-sell it to local businesses.

The programme was designed to both boost the deployment of renewables within London’s borders and help the capital’s businesses decarbonise, however Khan and members of the GLA now believe this vision could be expanded to include a residential enterprise.

In a new report published yesterday, the environment committee discussed the potential for EfL to become a fully-licensed energy supplier via a two-phased approach. Once EfL was fully established under the Licence Lite scheme – which was slated to be finished by last month following a licence supply application last year – a fully licensed supplier would be launched at a later date.

Two models are currently under discussion; EfL will either pursue a fully dedicated supply business or establish a ‘white label plus’ model under which an external supplier would run the business, however the GLA has stressed any supplier would have to agree to source its electricity from pre-defined generators.

This would also open up EfL to possibly procure electricity from domestic generators including rooftop solar – long since regarded as one of the most suitable forms of generation for London – acting as a further incentive for consumers and businesses to install solar on their homes and premises.

However the report notes the substantial risks inherent with operating a utility.

“Establishing the [supplier] will involve entering a new and highly regulated sphere of activity. Energy markets can be volatile and the EfLCo will need to be expert at assessing and hedging the commercial risks. The necessary due diligence will need to be conducted thoroughly,” the report warns.

To this end the report calls for the committee to be kept abreast of all findings from ongoing feasibility work and for details of any due diligence undertaken, particularly surrounding the financial risks, to be made public.

The Green Party Group has also offered a dissenting opinion to the proposals, believing that the white label option would actually hamper the mayor’s ability to meet the desired outcomes of the scheme, which are to alleviate fuel poverty.

Leonie Cooper, London assembly member and chair of the Environment Committee, lauded the potential for EfL to help tackle fuel poverty and praised the “excellent” recommendations within the report. 

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