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Consumers at the Heart of the Energy System?

21 September 2018

Senior Policy Research Manager Hanae de Rochefort reviews the British Institute of Energy Economists Conference which took place in Oxford this week.  

A really exciting line up of speakers discussed what a future energy system which places consumers at its heart might look like. 

Electric vehicles (EVs) are expected to be the biggest disrupting technology in the 2020s said Angie Boakes, Managing Director at Shell UK. This raises challenges for utilities, networks and the regulator in managing a cost-effective system. EVs open a huge potential for demand-side response in a more decentralised energy system, whose future depends a combination of infrastructure and policies. Joe Perkins, Ofgem’s Chief Economist, presented the possible future of energy consumer protection, adding that more was needed to understand disengaged customers in the lead to the Government’s price cap review in 2020.

My favourite presentation was “Do consumers want the new business models we can offer?”, by Dr Stephen Hall from the University of Leeds, which looked at the biggest decisions consumers can make in the energy system. The research, underpinned by a consumer segmentation survey, suggested that consumers are most attracted to a smarter energy system (dubbed “Smarter andSimilar”), while the business model of the Big 6 came last in the range of consumers’ preferences. Interestingly, consumers with a smart meter tended to be the most engaged ones, a positive note for the Government’s smart meter programme.

Looking at the impacts and implications of a consumer-driven energy system, speakers shared their thoughts on priorities for government, the regulator and industry, suggesting that communicating what is coming in the way of consumers and developing policies on the consumer-side of the meter can encourage interactions, which in turn can prevent the incumbent from keeping their control on the system.

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