Energy News

Ovo Energy cuts prices by 5%

Friday 6 January, 2012

By Martin Fagan

After cancelling a price increase last November, Ovo has announced it will further reduce prices with immediate effect.

Niche supplier Ovo Energy has announced a 5% reduction in prices. The price cut should translate into a £55 annual saving for an average customer.

Last November, after earlier announcing it would raise prices by 6.2% for new fixed-rate and 3.5%for existing variable-rate customers effective from January 2012, Ovo said it was cancelling the price increase due to a drop in wholesale energy costs.

Over the last 12 months, the average energy bill has risen by £224 or 21%, according to independent switching service uSwitch.com.

Ovo Energy’s decision to cut prices follows rival company Co-operative Energy's announcement that it is dropping its standard dual fuel prices by £35 a year. However, the Co-op's price cut doesn't come into effect until 1 February.

“We strive to offer our customers the lowest prices we possibly can,” said Stephen Fitzpatrick, managing director at Ovo Energy.

“We continue to champion our Fair Price Pledge and we will do everything we can to ensure that our customers always get the best possible deal.”

Commenting on OVO Energy’s decision to cut prices, Tom Lyon, energy expert at uSwitch.com said: “This is the kind of consumer-friendly move we've come to expect from Ovo.

“The move is another reminder why smaller players are so welcome in the market - they are nimble enough to be able to turn price cuts around far more quickly than the bigger players, making them a good consumer-friendly alternative.

“No doubt this appeal will have been further enhanced by the fact that Ovo Energy is now the second cheapest supplier on the market with an average annual bill size of £1,061.

“This offers an average saving of £66 a year compared with being with one of the ‘big six’, making Ovo a competitive and viable alternative. Only First:Utility, another small player, is cheaper.”

Ovo Energy was founded by Stephen Fitzpatrick in 2009 and has over 70,000 customers in the UK and only two tariffs: New Energy Plan with 15% renewable electricity and Green Energy Plan which offers 100% renewable energy. Ovo is Latin for “from an egg”.