Years after the U.K. privatized utilities, London’s mayor Sadiq Khan is moving things in another direction, in hopes of stimulating renewable energy use.
Kahn launched London Power, offering city residents renewable energy that’s almost $400 a year less than what they pay now.
London Power promises that all the electricity used by its customers will be matched with power generated from renewable sources such as solar and wind, seeking to reach its “Zero Carbon London” goal by 2050. London Power’s profits will be used to tackle climate change and address the city’s so-called fuel poverty, where one in ten Londoners can’t afford to pay energy bills.
Although London Power is founded by the city government, the services are provided by private firm Octopus Energy. The five-year-old company is part of Octopus Group, whose businesses range from energy and healthcare to wealth management.
“London Power embodies the future of energy companies in the U.K.; localised, affordable and 100% renewable,” said Nina Skorupska, CEO of Renewable Energy Association, in a press release.
The government-owned company was launched against the backdrop of private investors’ decreasing interests in London’s clean energy startups. Venture capitalists only spent $12.6 million on five London startups focusing on renewable energy last year, an 86% slump from 2018. In contrast, global VC investments in renewables scored $1.17 billion in 2019, almost doubled from 2018, according to PitchBook data.
- Wind farm construction has declined over the past two years in the U.K. after growing into one of the world’s biggest users of wind power. The government stopped subsidies for onshore farms in 2016. Only 23 onshore farms with a total 629 megawatts capacity were built last year, less than one fourth of 2017, according to Renewable UK.
- London was ranked the worst in England for renewable energy usage four years ago by think tank Green Alliance. Only 0.48% of households in London were equipped with solar roofs, behind northern cities such as Grimsby, Warrington and Doncaster.
- Both public and private investments are driving cleantech innovations. Brussels-based Horizon 2020, part of E.U. Research and Innovation Program, and U.S. Department of Energy invested 27 and 23 cleantech startups respectively in the past five years, more than any private investors, according to PitchBook data. Boston-based Mass Challenge and Plug and Play Tech Center of Sunnyvale, California are the most active cleantech startup accelerators with 19 and 17 investments each during the same time period.