Energylinx UK Energy Industry News Service
July 23, 2012
Cornwall Together: How Much Will Customers Not Save?
Edward Davey, the Secretary of State for Energy and Climate Change, announced the launch of a new collective switching scheme in Cornwall today.
Cornwall Together, which is being powered as a cooperative between several organizations will be the latest of a series of collective switching schemes throughout the UK which aim to encourage competition within the industry that will drastically benefit a group of consumers. In fact, Davey predicts that the scheme should save Cornish households up to 20% each on their energy bills; however, such a goal might be a little too presumptuous.
Although collective switching campaigns undeniably save consumers money, they have yet to provide said customers with a maximum level of savings. The Big Switch Campaign – the year's first exploratory collective switching scheme – saved customers an average of £123 each by switching to Co-Operative Energy's single-serving bid-winning tariff; however, this offering from the Co-Op was not the UK's cheapest tariff on offer at the time, indicating an inherent underlying organizational issue as indicated by the mantra of collective switching. Indeed, Big Switch participants missed out on an additional £340,000 in savings by collectively switching onto the Co-Op's plan.
Likewise, the Huge Switch campaign managed to save its participants around £131 per household; however, both campaigns managed to save the majority of consumers around 10% – why is Ed Davey so confident that Cornwall Together will double this savings?
The figures being quoted are nowhere near accurate. Assuming that every Cornish household participating in the scheme had never switched energy suppliers, used British Gas's standard gas plan in conjunction with EDF Energy's standard variable electricity tariff and was currently ineligible for all of the discounts associated with said tariffs, the scheme would render a maximum savings of 18% per household.
That being said, over 40% of households have switched suppliers in the past – and, therefore, are not in a situation comparable to the worst case scenario provided. Furthermore, the average household in Cornwall is currently paying £1,168.01 for its annual energy bills. As a result, the Cornwall Together scheme would have to save those customers at least £233 in order to reach its goal of 20% savings – over £100 more than both the widely-publicised Big Switch and Huge Switch campaigns saved their participants.
It should be noted that the goals of Cornwall Together are indeed commendable; however, the group's overly ambitious goals should not make any promises that they cannot keep. With any luck, the scheme will save the people of Cornwall money on their energy bills – yet hindsight suggests that the scheme will not render maximum savings to Cornish households, let alone reach Ed Davey's boast of a 20% decrease.
Blanket schemes such as collective switching do not cater to individualistic energy needs – and as a result, impose offers upon customers that may or may not be the best deal for their home. On the other hand, by pursuing switching energy suppliers via an independent service such as Energylinx, energy customers are guaranteed to receive 100% free, impartial and risk-free advice regarding what tariff is cheapest for their unique lifestyle.
Posted by energylinx at July 23, 2012 5:12 PM Technorati: Energy Prices