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UK – Collective Purchasing and Switching Introduced

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The UK is introducing collective purchasing and switching, with a view to empowering energy consumers to ensure they receive a good deal on their gas and electricity tariffs without the need to shop around comparing the tariffs.

According to the advice for consumers published by the Department of Energy and Climate Change (DECC), there is no set model for how individual schemes will operate, although usually this kind of activity would be facilitated by a third party.

In the advice, the DECC envisages a six-stage process the organization would need to follow:

  • Market the scheme to find potential members of the group
  • Gather information about individuals’ energy consumption and requirements
  • Negotiate with the energy suppliers and secure a deal for their group
  • Inform the group about the deal
  • There may be a time limit by which individuals need to accept or reject the dealIf the deal is accepted it is likely that the third party will manage the switch of the group to the new supplier.

Energy Secretary Edward Davey said ““I want to help make collective purchasing become a permanent feature of the U.K. energy market. This can be a really useful tool for consumers by making it easier to move to a better deal and to get real savings on gas and electricity bills, as well as helping boost competition.”

The DECC outlines the possibility of charging a fee for the services, such as the winning supplier for each customer that switches to the deal. They also stressed the need for legal advice.






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