There’s an unusual experiment happening right now in Britain’s energy market. It’s being run by the online community activist network 38 Degrees and consumer group Which, in response to high energy prices. They are inviting people to club together to negotiate cheaper prices by mass bargaining.
There’s an open market for energy in Britain. You can choose your supplier, and so the various energy companies compete to get customers on their various tariffs. That’s supposed to produce healthy competition and keep prices down. Unfortunately, the domination of the big players and the general hassle of switching supplier hasn’t had the desired effect of reducing prices for ordinary households.
Since we only switch as individual households, the energy companies don’t lose a great deal of sleep over people moving suppliers. But if you could get a whole group of people together, you’d have a major pool of potential customers that the energy companies couldn’t ignore. That’s the idea behind The Big Switch. You can register your interest by the 31st of March, and then negotiators at Which will contact the energy companies and run a reverse auction – who can offer the lowest prices to these customers. At the end of the day, participants in The Big Switch will be emailed with the best offer, which they can then take up or refuse on an individual basis. The more people sign up, the more power the negotiators will have with the energy companies.
It’s been tried in the Netherlands, where consumer group Consumentenbond negotiated a deal for 20,000 people. It’s never been tried in the UK before, and with a million people on the 38 Degrees mailing list, this could be quite a significant move in the energy market. There are already over 48,000 signatories.
Personally, I won’t be taking part because price isn’t the major factor behind my choice of energy supplier. I wanted a company that was proactively changing Britain’s energy future (I chose Ecotricity). For households struggling with their bills, price is much more important, and I think The Big Switch is a radical idea that’s well worth supporting.