Utility Week

UTILITY WEEK | JULY 2022 | 21 Talking Points… "We want to stop water company executives being paid a penny in bonuses until waterways are protected from these outrageous sewage dumps. I also think these bosses should be made to pay back the millions of pounds they have already received in bonuses until we can clean up this mess." Daisy Cooper, Liberal Democrat MP "The ever-downward trajectory of prices can no longer be taken for granted and there is increasing concern about sustainability in the market." Dan McGrail, chief executive, RenewableUK "Water use was rising even before Covid hit, despite lofty ambitions to bring it down. We want to see water effi ciency actions hand-in hand with the climate crisis – net zero and climate change mitigation and adaptation." Nicci Russell, chief executive, Waterwise Quote, unquote climate crisis – net zero and climate change mitigation and adaptation." Nicci Russell chief executive, Waterwise they have already received in bonuses until we can clean up this mess." Daisy Cooper Democrat MP is increasing concern about sustainability in the market." Dan McGrail executive, RenewableUK Building a retail energy market fi t for the future T he energy market over the past year has been de ned by high wholesale energy prices, supplier failures and volatility. Following the welcome announcement of further sup- port, we'll continue to track the impact of this crisis on our clients to ensure help is reaching the people who need it most and call for more action where people are falling through the gaps. But looking beyond the short-term impact of the crisis, we're also thinking about how to build an energy market that learns the lessons of the last year and helps deliver our vital net-zero targets in a fair way for consumers. Earlier this year, Citizens Advice hosted a roundtable of senior industry stakeholders and academics. The focus of the discussion centred on what the objectives of the future retail energy market should be, and what action is needed to get there. Our starting point was the objectives set out in the government's Energy Retail Market Strategy, which is currently under review. These are fair prices and protection for consumers, energy companies being able to invest in innovative low-carbon tech- nologies, and consumer choice and active market competition contributing towards a lowest-cost ‚ exible energy system. There was broad agreement that these are still the right objectives, but that there is signi cant tension between them, for exam- ple, the short-term upfront cost of energy e„ ciency, despite this being essential to the long-term objectives of decarbonising. There was also agreement on the need for a fourth goal – market stability. While there must always be room for competition and innovation, policymakers and regula- tors must look again at measures to ensure consumers don't pay for failure. Much discussion focused on how suc- cess is actually measured. Over the past decade the health of the energy market has o‡ en been seen in terms of annual switching levels. Participants felt this needed to transition towards a broader set of met- rics, including the success of suppliers in helping customers decarbonise. Building on this, we will advocate for clear success meas- ures in forthcoming government and regulatory retail strategies. This should include tracking progress with helping people make low-carbon choices, while rec- ognising that switching is likely to continue to be an important way to save money for those using traditional gas and electricity services. A second major theme was how to nance home energy upgrades through the market. Contributors felt that successful proposi- tions that were attractive for consumers had not fully emerged, and that a future market should enable these while avoiding locking people into smart energy services. We'll continue to focus on how products can work for people, and we've already called for a new consumer duty to raise standards and ll protection gaps in the energy market. Finally, there was recognition that the future market is likely to feature stronger price signals that reward customers who can be ‚ exible with their usage. However, the likelihood of elevated energy prices for years to come means that many people can't aŠ ord higher prices, and we also risk seeing more a‹ uent house- holds race ahead. We've done a lot of work to tackle the barriers that can prevent people from adopt- ing new services that unlock value. But it's vital we also protect those who can't do so and are likely to be hardest hit by new price signals, to ensure people can meet their energy needs and have con dence that the transition to net zero is fair. Gillian Cooper, head of energy policy, Citizens Advice Comment: High energy prices highlight the need to factor in affordability to plans for the net-zero transition.

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