Collective buying scheme to secure cheaper energy tariffs and tackle fuel poverty in Cornwall

July 23, 2012
Author: Hannah

The Secretary of State for Energy and Climate Change Ed Davey visited the Eden Project today to launch a ground-breaking collective buying scheme which aims to tackle fuel poverty in Cornwall.

The new scheme, Cornwall Together, is to help households across the county save an estimated £3.7 million through cheaper energy tariffs. It is hoped more than 20,000 people may be able to reduce their energy bills by 10-15%.

It’s thought to be the first time an entire county has united as a community to buy energy more cheaply, enabling it to also tackle economic problems, encourage environmental sustainability and improve people’s health and wellbeing.

How Cornwall Together works

  1. Residents register their interest with the scheme to find a cheaper energy tariff, providing details of their current fuel bills.
  2. Cornwall Together will negotiate on behalf of all those that have registered to get best value tariffs. As well as identifying best value deals, wherever possible a green energy option will be offered.
  3. For each energy switch, 10% of the total money saved will be put back into a fuel poverty fund which will benefit the whole county. Cornwall Together will then seek match-funding from other organisations.

Conceived by the Eden Project, Cornwall Together was originally pioneered by Cornwall Council, the NHS, Community Energy Plus and Community Buying UnLtd. They have been joined by delivery partners energyshare – the community renewable energy platform – and uSwitch.com, the independent price comparison and switching service.

St Austell Brewery and Unison are also supporting the scheme, promoting it to their staff and also helping Cornwall Together reach vulnerable members of the community.

Tim Smit, Eden’s Co-founder and CEO, Development, explains: ‘Cornwall Together is born from a spirit of community. Saving money is important, but the programme is also about bringing the people and businesses of Cornwall together. We hope to create more resilient communities and a deeper sense of togetherness as we negotiate as a powerful unit.’

Fuel poverty in Cornwall
Collectively, Cornish households spend around £1.2 billion on energy each year. According to the NHS, 25% of these households are in fuel poverty.  Across the UK the average household energy bill has rocketed by 140% a year since 2004 (from £522 to £1,254). Cornwall Together wants to secure cheaper energy bills for residents, helping to reduce fuel poverty in the county – and its associated health risks.

Hand holding electricity and gas bills

NHS Cornwall and Isles of Scilly’s Director of Public Health, Felicity Owen, said: ‘What excites us about the Cornwall Together initiative is its community focus and the potential to reduce fuel poverty, which can lead to excess deaths in winter and contribute to other health conditions.’

Cornwall Together will first negotiate for cheaper gas and electricity. It will then also negotiate for heating oil, to accommodate the significant number of people in Cornwall’s rural areas who aren’t on the mains gas grid.

Once the concept is proven, the initiative will be launched in other counties as part of a national UKTogether campaign.

To see if you can save money on your energy bill, join up at Cornwall Together by visiting www.cornwalltogether.com, where you can also register your interest as a business.

Comments:
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11 responses to Collective buying scheme to secure cheaper energy tariffs and tackle fuel poverty in Cornwall

  1. Mrs S Williams says:

    very much hoping to get better deals for us in Cornwall…

  2. John Eaton says:

    Sounds like a great idea ,why shouldn”t we get a better deal

  3. andrew ford says:

    I am really not sure how this will work.

    Corwall NHS, Eden, Local authorities etc buy energy (lets use electricity as an example) through a broker and probably pay around 10p a unit where as their employees are going to be paying something in the region of 15p a unit – clearly if everyone gets together they may be able to get down to 9p and everyone wins.

    However the NHS, Eden etc will be buying from companies such as corona, gazprom, shell (basically people producing energy and selling it whole sale) through their broker. They will be buying millions of units of energy and will be issued only 1 bill and there will be no requirements on the company selling the energy to read the meter at regular intervals etc.

    As soon as you add in domestic customers you have legal requirements such as having meter read and bills sent regularly etc. Also domestic customers tend not to be as regular and as likely to pay their bill as say Cornwall NHS, which would have a hard time defaulting on its obligations. Plus I cannot see the local authority in an area with such high fuel poverty wanting it residents to miss out on schemes such as the warm home discount (broader group) and priority services register benefits etc.

    So two solutions
    1) to apply for a light licence to supply electricity – I have spoken to both the local authority and to Cornwall NHS and they said that there were not considering this option as they deemed it too complicated.
    2) to go to energy companies that will supply both domestic and non domestic. As we have seen from domestic schemes such as the ‘Big Switch’ market beating rates are not out their even with hundreds of thousands of people wanting to switch. But even if you could get a market beating rate it would probably be similar to the recent Scottish power price reduction where they beat EDF by £2 a year.

    So thats domestic properties with £2 off their annual bill.

    Non-domestic would need to go to one of the big 6 too and they would end up paying more than they would through a broker and be using a company that is not used to high energy multiple site businesses.

    I also do not know of any payments paid for switching made in the bulk buying sector only in the retail sector for SME and domestic customers.

    I really like the idea of this scheme but cannot work out how mixing in business customers lowers the energy bills for everyone involved. If there is another way around this please let me know because I really want this to work and would love to implement it myself.

  4. Hannah says:

    Thanks for your enquiry Andrew. We’ve asked the Cornwall Together team and they do admit that combining business and domestic contracts has never been done before and that it will be a journey of discovery to see if and how this can be done. Their business page from the link at the bottom of the home page states that combining business and domestic contracts will be a challenge but they seem up for it and are going to have a go and see where they get to!

  5. andrew ford says:

    Thanks for the reply Hannah.

    I agree that combining domestic and non-domestic has not been done before however it has been looked at many times by many different groups and found to be unworkable which is why many people were surprised when Ed Davey promoted the scheme at the round table a couple of months back particularly as Cornwall Together seemed to not be aware of the changes by OFGEM required and the legislation changes inorder to make the scheme work (quite apart from the practical challenges).

    It is good that Cornwall Together have realised their are challenges as previously they have presented the idea as something that they could just do and as a no brainer and anyone who wasn’t doing this was clearly failing their residents which put many peoples back up who had been working on these sort of schemes for many years.

    This is the first scheme which has government backing and OFGEM have been positive towards it so hopefully the required changes can take place.

    I still imagine that given the practical challenges in the energy market that the most realistic plan would be to group the business accounts and the domestic accounts separately in the short term and then apply for a light licence to supply electricity in the medium to long term.

    Although this would be costly to implement it wouldn’t require any changes to the existing system and with the advent smart meters it would make running an energy company in a rural location much more cost effective.

    Obviously an oil/LPG buying group could be added to the scheme without too much fuss and make the offering potentially more desirable by enabling duel fuel buying for many people.

    I wish Cornwall Together every success in this endeavor – Hopefully they will find a way through where everyone else has failed. It will be really interesting to see what the scheme looks like in the end.

  6. billy morrison says:

    Dear sir or Mad
    on the 24th july i was at your project it was fantastic when entering hear i was given a recipt and it staited i will be paying tax 25p in the pound i am now would like to cancel this declaration and no longer pay want to pay tax or on my income and capital gains i am so sory there was no phone number or address to contact you regarding this was the only way i can do this

  7. Hannah says:

    Billy, we’ve passed this comment on to our Annual Pass team.

  8. Denise Belshaw says:

    sounds good to me, any scheme that saves us money in Cornwall has to be a good idea!

  9. M J & Mrs R E COX says:

    Hope we are not too late to register.

  10. tina daniels says:

    i used 2’035kwh of electricity last year and 2860kwh of gas.What would cost be with your scheme. Thanks tina

  11. Hannah says:

    Tina, could we invite you to pop your details into the box on http://www.cornwalltogether.com and you’ll be able to immediately see your savings!

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