Citizens Advice, Energy UK and the Association of Decentralised Energy (ADE) have together developed a risk register for domestic demand side response. Demand Side Response (DSR) incentivises people to change the way they use energy based on price signals e.g. incentivising people to charge their electric vehicles at night when there is less demand.
The register, which is released today as part of a new report Demanding attention: Managing risks today, to improve customer experience tomorrow, looks at:
● potential consumer risks
● where they are covered by existing legislation
● what work is currently being undertaken to address these risks in the future
● where there is likely to be a protection gap in the future
Recognising the need for positive outcomes for consumers, Citizens Advice, Energy UK and ADE have set out in this report a series of different approaches to energy services to identify any gaps in protections.
As the UK decarbonises how we travel, how we heat our homes and energy generation, there will be increased use of electric vehicles, heat pumps and smart domestic appliances. These products will offer the potential to be ‘flexible’ with how and when energy is used in the home, for example, by using electricity when low carbon generation is high.
Companies will offer consumers services to help them use electricity flexibly, balancing the grid while using smart controls to meet consumer needs. Many companies, including members of Energy UK and the Association for Decentralised Energy (ADE) are already offering such services. Continued innovation in the market will mean new and different services become available.
While industrial DSR is already relatively widespread, DSR in homes is still relatively new. To enable this market to grow well and reduce the cost of decarbonisation to consumers, people will need to have confidence through strong protections and the transition to new offers will need to be inclusive to all.
Gillian Cooper, Head of Energy Policy at Citizens Advice, said:
The transition to net zero is going to bring huge changes to everyday life, including how we heat and light our homes, how we use domestic appliances and how we travel.
“It’s vital the potential benefits this will bring are open to all. For the transition to be successful, people will need the confidence to make these major adjustments. This means identifying and addressing early on any potential gaps in consumer protections.
Citizens Advice is working with the government and the energy industry to make sure the move to net zero is truly inclusive. We will continue this collaborative approach as low carbon options are adopted more widely.
Caroline Bragg, Head of Policy at the ADE, said:
For households, flexibility offers the opportunity of great customer service and earning money from the energy system, not just paying towards it. For the system, domestic-level flexibility, with broader flexibility from business, offers the only way to reach net zero without breaking the bank.
Domestic flexibility is still very nascent in the UK but it will, and indeed needs to, take off in the next few years. As the industry grows, it’s crucial that we continue to deliver consistently good customer outcomes.
Today’s report, the fruit of collaboration between industry and consumer advocates, is a proactive step to making sure we continue to achieve this.
Charles Wood, Head of New Energy Services and Heat at Energy UK, said:
Meeting our climate targets is increasingly going to involve consumers as they adapt to big changes in how they use energy, heat their homes as well as their transport. New services and technologies offer exciting potential benefits but having the right protections in place is essential to developing the customer trust and confidence that will enable a successful transition.
Energy UK’s growing and diverse membership reflects this rapidly changing market, and it is important that both established and new providers continue to meet the needs of their customers.
Identifying any potential gaps in consumer protection in an evolving market is an important step and, while we have not identified any immediate issues, providing the right information to customers - particularly with innovative new services and products - is vital. We will continue to work with consumer and industry representatives to make sure this happens
Link to the full report, including the risk register can be found here