Utility Week

Uberflip 15 11 13

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/209844

Contents of this Issue


Page 5 of 31

Comment Chief executive's view Juliet Davenport, chief executive and founder of Good Energy Riding the perfect storm The energy market was designed 25 years ago to deliver energy at the lowest cost, regardless of the environmental impact. Today, it's time to stop tinkering with that market and adopt a fresh approach. W e couldn't be facing a more "perWhat is policy doing to recognise and fect" storm. Rising energy costs, reward those people who choose environplummeting consumer confidence mentally superior green energy over traand energy bills are splashed over the head- ditional brown energy when it comes to lines of every newspaper in the country. And picking their energy supplier? all of this is taking place while the governSecond, we need to attract the widest ment is pushing through the most major possible range of new entrants to the marreform of the energy market since privatisa- ket as part of the decarbonisation process. tion, only 18 months from a general election. The accessibility of renewable technology is The reality is that neither a price freeze, key to that. This is not just about unlocking nor a windfall tax, or even cutting the cost of new sources of investment. It's about taking policy is going to get to the nub of the issues advantage of the technology to boost compeour market faces. It's going to take more than tition in the long run. a short-term fix. We still need to decarbonise How are investment incentives being our power sector and we still need to reduce structured, through things like Electricour exposure to volatile international fossil ity Market Reform, so that they encourage fuel markets. competition? While there is a short-term cost Third, the retail market has to to meeting those challenges, we all provide positive incentives for supknow there is a longer-term cost pliers to deliver and consumers to attached to not meeting them in take up energy efficiency measterms of climate change, in terms ures. Instead of placing punitive of energy insecurity and in terms obligations on suppliers to deliver of our economy. energy efficiency standards, we In the midst of all the noise need a market-based approach that about energy, some important provides incentives to deliver new questions have been drowned out. People, savings to consumers, through drivWhat hasn't been discussed or ers like smarter tariffs linked to the not energy considered nearly enough is how times of the day when renewables the design of the market can bene- companies, are generating electricity. fit those who are paying for it: con- should be at What is being done to ensure sumers. The answer lies in the fact the heart of that the decarbonised market crethat the consumer is both a solu- our energy ates new opportunities for consumtion and a cause of this problem. ers to have more control of their Power, literally and metaphori- market energy use to save money? cally, remains highly centralised, The problem is that these fundaout of the hands of the people who use and mental questions about how the architecture pay for it. And that will continue to be the of our energy market could help consumers case unless we change our approach. People, are simply not being asked loudly enough at not energy companies, should be at the heart a time when they matter the most. of our energy market. Instead, the focus is on adapting the This requires fresh thinking and compels existing market as best we can to achieve our us to reconsider the way our energy market decarbonisation objectives. We are trying to operates. The current debate dissuades this. fit a square peg in a round hole. First, we need to better use customer It is time for a fresh approach that demdemand to stimulate investment in green onstrates the same kind of depth of thinking technologies. If customers can see a tangi- that took place 25 years ago when the market ble benefit to buying green electricity, it will was first privatised. make it easier for renewable generators to Back then, the objective was to deliver attract the investment they need. consumers the cheapest possible energy sup- 6 | 15th - 21st November 2013 | UTILITY WEEK plies regardless of the environmental cost. But until we reassess that aim and replace it with a new one – to ensure the decarbonisation process provides a lasting benefit to the consumer – then the terms of the energy debate will not change. And there is appetite for change. Consumers are no longer passive purchasers of energy. They're ready for renewables, and Good Energy has always been about creating new opportunities for people to be involved in their energy future. This was evidenced when, in October, we launched our first corporate bond. Our goal was to broaden the way we funded our new developments, providing our customers with a means by which they could invest directly in our plans… and their own energy future. We not only exceeded our base target of £5 million but also – three weeks ahead of schedule – reached our maximum of £15 million, meaning we had to close the offer early. Importantly (and encouragingly) around 80 per cent of the applications we received were from our customers. What better testament to the desire of consumers to actively participate in the shape of our future energy world? There's a blossoming of diversity, not only in sources of investment but also in energy generation and energy ownership. Interest in community renewable energy schemes, large and small, for example, has been sweeping through the UK. For example, Wedmore Power Co-operative in Somerset recently saw its community solar farm switched on, and more than 120 investors from the local area bought shares in the scheme. The government has been promising to increase competition and put customers in control. Renewables are uniquely placed to deliver both these aims. It's time to acknowledge the role the sector can play and to reframe the debate now before we miss the opportunity. Addressing the challenges properly with long-term energy security in mind, and with a focus on creating a consumer-centric energy market, will ensure that the UK is fit to weather the storm.

Articles in this issue

Archives of this issue

view archives of Utility Week - Uberflip 15 11 13