Utility Week

12 | 3RD - 9TH MAY 2019 | UTILITY WEEK Policy & Regulation Analysis E aster saw 90 hours of UK electricity generation with no input from coal- fired power stations. For nearly four days as Britain basked over the bank holiday weekend, the grid was coal-free, breaking the previous record of 76 hours set the April before. This event offered a glimpse of the near future: 2025 to be exact, when the govern- ment has pledged to ban the most heavily emitting fuel from the electricity system. The following week therefore turned out to be a good time for the future of energy to be under the industry's microscope. Energy UK returned to work by publishing its long-awaited Future of Energy report, which examined the implications of trends such as digitalisation and decarbonisation. And Citizens Advice held a conference exam- ining how consumers will fit into this trans- formed energy system. The technological revolution the industry is undergoing will also have huge implica- tions for how energy utilities interact with their customers, says the Energy UK report. New, specialised models The proliferation of new technologies and business models means the understanding of customer engagement will have to become "more sophisticated", "going beyond simply measuring switching rates". It will have ramifications for how sup- pliers are set up. Current market struc- tures mean energy retailers must deliver a number of "fundamental functions" such as metering, settlement and billing. But this won't necessarily be the case in the more diverse market environment of the future, says Energy UK. Some companies may be interested in offering bespoke products that only serve a particular facet of a customer's energy needs, such as heating or transport. The report says it is "important" that existing market arrangements do not thwart the development of these new and more specialised models. And forcing all service providers to undertake all the functions of a traditional supplier may end up hitting consumers in the pocket, the report adds. But this more diverse energy ecosystem offered scope for responsibility to become blurred between different providers and regulators, said Dhara Vyas, head of future energy services at Citizens Advice, who spoke at the House of Commons launch of the Energy UK report. As an example, she pointed to the diffi- culties if the same customers have multiple meter points. "The worst case scenario would be stranded consumers, who are not able to sort their problems, going from one potential supplier to another and being pushed from pillar to post. "Some customers would find it hard to be very aware and know what to do. "It's important that people in the indus- try, government and regulator think about how the journey for customers is going to be simple," she said, adding that some cus- tomers will continue to need some form of protection. This is just one of the questions that energy transformation raises regarding the relationship between energy suppliers and their customers. In any future retail market, Energy UK says it is "imperative" that all customers are able to access energy on terms that are both affordable and commercially viable for suppliers. The report says improvements in data- matching can help to ensure that vulnerable customers are better identified, protected and offered solutions, enabling them to access the benefits of a digitalised and more consumer-orientated energy market. Consumer safe space But even with these advances, some cus- tomers will still be less able or reluctant to engage. Professor Jim Watson, director of the UK Energy Research Centre (UKERC), told the Citizens Advice conference that he agreed government and regulators have a "really important role" to provide a "safe space" for consumers. "The risk is that some consumers and households get leœ behind and leœ out," he said. Consumers are a diverse bunch and need to be thought about in a much more "sophisticated" way, Watson said: "Too oœen, we are still talking about consumers as if they are all the same. There are peo- ple who will be very early adopters and will want to be very engaged and others will be missed out altogether." He suggested part of the problem is the term consumer itself, and that when it comes to a multi-faceted service such as energy, it is better to think in terms of customers as citizens. "Consumers is a very limited word in itself," he said, adding that the term citizen is a better way of framing people's inter action with energy. A system to fit energy users Following a record weekend for coal-free generation, Energy UK and Citizens Advice outlined their ideas for a decarbonised and digitalised future energy system. David Blackman reports. People "strongly support the change towards a lower carbon energy system"

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