Energy Action Scotland hails the launch of a new community energy scheme. But are such schemes able to realistically tackle fuel poverty?

With the launch of a new independent energy supply company that has ambitions to sell power to tenants across Scotland, are we seeing the birth of a new way of keeping energy bills under control?

Our Power has been founded by 35 housing associations and local authorities and aims to supply electricity and gas to 200,000 tenants’ homes by 2020. It expects to save them up to ten per cent of their bills compared with standard commercial tariffs, and this could add up to a saving of £11 million in some of the most disadvantaged communities across the country.

The initiative, which is non-profit distributing and is set to enter the energy market by the end of the year, has been hailed as ‘ground breaking’ and ‘monumental’.

But given that fuel poverty levels in Scotland are at a record high and the deadline for eradicating the problem is fast-approaching, will this move provide the answer?

Scottish Government figures show that more than a third of households are fuel poor, meaning that they have a daily struggle to heat and power their homes at a price they can afford. The three main causes are known to be a combination of buildings that are energy-inefficient, low disposable household income and high energy prices.

Social housing providers such as housing associations provide good support services for vulnerable and disadvantaged consumers. Some of them have undertaken surveys that have shown less engagement by their tenants in the energy market but also that the housing association is viewed as a trusted source of information and support. It is not surprising, therefore, that social housing providers want to act to provide a remedy to their tenants’ energy worries.

For years there has been talk of creating energy services companies as an alternative to the mainstream energy supply companies and there have been some attempts to do this. Our Power is an important step towards this holy grail and, if successful, will be a useful addition to the range of solutions to fuel poverty.

However, it is vital that while working to lower the cost of fuel bills for disadvantaged households, the partners involved do not take their eye off the ball in terms of improving the energy efficiency of people’s homes. There must be continued investment in energy efficiency in order to drive down overall energy demand – reducing the need for energy consumption is every bit as important as lowering energy costs.

Combining efforts to keep energy prices low and to minimise the amount of energy needed in the home will have the multiple effects of tackling fuel poverty and increasing disposable income. It may also produce health benefits in the longer term by creating a better environment for people to live in.

More power to the elbow of Our Power.