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Moving away from energy bills: A new way to buy energy?
It has recently been reported that customers of ScottishPower will soon have the option to buy their gas and electricity in bundles of days. This will see their customers having the option to not sign up to a standard or fixed price deals.
This new system has been introduced in an attempt to simplify energy bills. It will work in a similar way to filling up your car or buying data bundles, customers will use an app to measure consumption and gauge when they need to buy more energy.
ScottishPower chief executive, Keith Anderson, spoke to the BBC about their new plans; “We’re saying to people buy it by the day, not by kilowatts or a fancy tariff you don’t understand.”
Many may be concerned about what a day of energy entails and whether it will be too much or too little for their household. To combat these potential flaws in the system, the company will tailor each customers ‘day’ based on a personalised forecast of how much energy they typically use.
The time of year it is will also be taken into account, as typically household energy consumption is lower in summer than winter.
ScottishPower have recently been piloting the scheme and believe it is an idea that could positively change the way we, as consumers, buy our energy. All ScottishPower customers will have the option to be able to buy gas and electricity packages for a day up to a month, up to 180 days in advance.
The inspiration for the scheme came from the car industry as Mr Anderson explains; “You go to the garage and put £50 in your car. Inherently you know that will last you two to three weeks. We thought why don’t we do the same thing with energy.”
The app that accompanies this scheme allows you to keep track on your energy levels and usage so you only buy when you need more energy for your household. As a result, you will not have to pay any standing charges which have considerably pushed up energy bills over the years.
ScottishPower have stated that the tariffs for this new scheme will be some of their most competitive prices to date. It will be launched to existing customers initially and the company will then consider opening this up to the wider market.
This new scheme comes in reply to a two-year investigation into the energy industry by a range of competition authorities, who found that consumers are paying too high a price and failing to switch to cheaper deals.
This new idea from ScottishPower has been welcomed by the energy regulator, Ofgem, who said; “We encourage suppliers to offer new innovative tariffs to help people engage in the market and find the best deal which suits them. Innovative tariffs can be tailored to an individual consumer’s needs and give people more control over their energy bill and how they pay for it.”
At a time when energy prices are higher than ever and competition is slim, new ideas such as this could be the thing that makes the energy market work for consumers and lowers prices.