Local authority energy companies to drive down business energy costs?

New energy market entrants have their spoons ready...
New energy market entrants have their spoons ready…

Local authority energy companies could be the next wave of competition to business energy suppliers.

Nottingham City Council officially launched its energy supply company yesterday. Named Robin Hood Energy, the label implies an intended redistribution of power.

The company has not yet launched its business energy supply offering, but plans to do so within the coming months. Businesses are invited to register their interest with the company.

Nottingham’s energy supply business is not limited to its home county and could soon be followed by other regional energy companies looking to attract national customers.

That could be good news for business energy costs. While the re-emergence of municipal energy companies has been some years in the planning, new energy market entrants should further drive competition and innovation.

Nottingham may not be able to provide the cheapest rates on the market, but Robin Hood’s energy prices were said yesterday to be cheaper than five of the big six suppliers.

Bristol is likely to be one of the next local authority owned energy companies off the blocks.

While Nottingham is using power from its incinerators and small scale renewables, Bristol has long-term ambitions to install and connect more local power to supply local demand – and potentially look at how the distribution network could be managed more smartly in the future. It is also building two new heat networks.

Providing local, secure sources of power and heat could also prove attractive to businesses – with local authorities recently citing those factors as key factors for investing in local energy developments.

Should municipal energy companies gain traction, it may be that they are more adept at delivering local services than large, vertically integrated firms. It may also be that they are better placed to help balance local supply with demand, which could reduce system balancing costs both regionally and nationally.

Around two dozen local authorities are currently looking at becoming fully licensed energy suppliers. Many will ultimately decide not to enter the market. But Nottingham is unlikely to be the only new entrant over the coming months – and businesses could benefit from even the threat of increased competition to the often high margins made on non-domestic energy supply.

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