Npower Hatches Nest Deal As Energy Row Rages

By Mark Kleinman, City Editor

One of Britain's biggest energy companies has struck a deal with a Google-owned smart technology provider amid the raging debate about rising energy prices.

Sky News understands that Npower, which is owned by the German utility RWE, will announce this week a partnership with Nest Labs, a connected devices-maker which was acquired by Google for more than £2bn.

The alliance will see Npower become the exclusive energy company partner of Nest in the UK, and comes as the big energy suppliers step up their investment in smart-metering technology.

Npower, which has acquired an unspecified number of the Nest thermostats, is expected to unveil plans for a series of new 'bundled' packages similar to those available in the mobile phone and pay-television industries.

These will include specific gas and electricity tariffs combined with Nest's smart thermostats, which claim to reduce home energy wastage.

The Nest partnership could be extended to other RWE operations across Europe over time, a source said.

The move to establish such agreements in an attempt to drive down domestic energy consumption reflects the anxiety felt by the big six utilities as competition authorities kick off a probe of the sector.

The inquiry is unlikely to be concluded until after next year's General Election.

Nest is run by Tony Fadell, one of the architects of the iPhone and iPad during his stint working for Apple.

The company's products will be sold in the UK through John Lewis and B&Q stores, as well as the Apple Store.

A rival smart home energy control product called Tado also launches in the UK this week.

It has secured distribution agreements with Dixons and Maplin Electronics, underlining the land-grab by the manufacturers of such products to secure prime space on the UK's high streets.

Tado claims to save consumers up to 26% of their domestic heating bills annually once the device is installed and the app is enabled on a smartphone.

British Gas, the biggest energy retailer, has a similar product called Hive Active Heating.

Last year, a report published by British Gas and Oxford Economics, a consulting firm, said that the gross savings of the UK's smart-metering programme between 2012 and 2030 would amount to more than £25bn,

A spokesman for Nest refused to comment on Tuesday.

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