Small energy supplier takes on big guns as Ovo launches cheapest deal

22nd November 2013

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The focus has switched to the UK’s burgeoning energy suppliers this week as Ovo Energy has thrown down the gauntlet and launched the cheapest fixed price deal on the market.

The move comes after rival small supplier, Utility Warehouse, signalled its intention to be seen as Britain’s seventh supplier, after signing a deal to transfer customer accounts from npower.

Ovo’s new deal, New Energy + Ovo Just Reward, includes a 5% discount for paying by direct debit but also gives customers more control over what they are paying as they can adjust their payments to suit their needs says comparison site uSwitch.

It says this flexibility comes at a lower cost too, with the tariff costing £1,175 a year on average – making it cheaper, albeit by just £3 a year, than E.ON’s Energy Fixed 1 year and First Utility’s iSave Fixed v12 June 2015, although E.ON’s early exit penalty is only £5 per fuel, compared to Ovo’s and First Utility’s slightly more prohibitive £30 per fuel.

And while Ovo takes the top spot for the cheapest fixed price tariff another small supplier, Spark Energy, holds the crown for the cheapest overall deal on the market. Its tariff, Advance 2, is variable and costs £1,116 a year – £59 a year cheaper than the Ovo tariff. However, it requires payment in advance and doesn’t offer consumers any protection from price hikes.

Tom Lyon, energy expert at uSwitch says: “The spotlight is now firmly on small suppliers as consumers and the market are waking up to the impact they could have on competition. There is still some reluctance from some consumers, but by offering attractive deals and making it clear that they are now part of the landscape small suppliers are definitely winning more and more over.

“The more that can be done to educate consumers about the benefits of shopping around and to give them the tools and the confidence to do so, the more likely they will be to engage. Competition will spark and consumers should start to see the benefits – fairer prices, better products and service and costs and inefficiencies driven down.”

Best buy plans

Supplier Plan Name Price
Spark Energy Advance 2 £1,116
Ovo Energy New Energy + Ovo Just Reward £1,175
First Utility iSave Fixed v12 June 2015 £1,178
E.ON E.ON Energy Fixed 1 Year £1,178
npower Price Fix April 2015 £1,202
EDF Energy Blue+Price Promise April 2015 £1,209

Source: uSwitch.com

Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas on a dual fuel tariff, paying by monthly direct debit with bill averaged across all regions.

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