A pint of milk, please and my electricity and gas: Co-op branches out

Now high-street stalwart the Co-operative Group is to expand into the sale of electricity and gas, with the launch of a firm that it hopes will rival the likes of ScottishPower and Scottish & Southern Energy.

Co-operative Energy, which launches nationwide today, has attacked its "big six" rivals for their "bamboozling" and "complicated" price structures, and has pledged to deliver a simplified system for its customers.

It also aims to source electricity from low-carbon generators, including renewable sources such as wind and hydro power.

But its services will come at a price - a typical user will pay 1,023 a year, compared with 965 for the average online energy plan.

Co-operative Energy spokesman Nigel Mason said: "It's time this industry had a radical shake-up. Customers have been bamboozled by complicated tariffs and confused by changing prices and unfair contracts, and it has to stop."

He added: "We are determined to provide a fair and transparent service for Co-operative Energy customers and to let them share in the profits.

"We are campaigning for long-overdue reform in the energy industry. We will set an example that will show the big six how it can be done better."

The company was founded by the Midcounties Co-operative, but it will cover all of Scotland, England and Wales.

Co-operative Energy's challenge to the "big six" comes weeks after industry regulator Ofgem announced a radical overhaul of energy charges in an effort to stamp out the complicate pricing structure favoured by the major energy providers.

Andrew Wright, Ofgem's senior partner for markets, said: "We welcome the fact that Co-operative Energy has recognised our Retail Market Review finding that tariff complexity is bamboozling consumers.

"Ofgem is committed to ensuring that consumers get a fair deal in the energy market and our proposals aim to make it easier for consumers to take part in the energy market.

"Our proposals to break the stranglehold of the big six over the electricity market also aim to make it easier for new firms, like Co-operative Energy, to enter the market. More competition in the energy market will benefit all consumers."

Co-operative Energy says the carbon content of its electricity will be less than half the national average by April next year.

Tom Lyon, energy expert at uSwitch.com, said Co-operative Energy's product was aimed at ethical consumers happy to pay a higher price for green energy.

"Renewable energy comes at a price, so it is important for households to compare what the Co-op is offering with other green energy plans," he said. "However, the Co-op is an established brand with an ethical heritage, so when a brand likes this says it is setting out to shake up the energy industry, everyone should be sitting up."