Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/680922
6 | 20TH - 26TH MAY 2016 | UTILITY WEEK People & Opinion Every which way The energy industry has had too many false starts, but the pressure for change has now become irresistible. Q&A Richard Lloyd, executive director, Which? W hich? executive director Richard Lloyd reflects on five years leading the consumer group ahead of his departure this month. During his time as the face of Which? Lloyd has been outspoken about where the energy industry needs to go and what it needs to do for con- sumers. His only regret, he says, is that too much time was spent "arguing about whether there is a problem and not enough time hammering out solutions". Lloyd spoke to Utility Week about his concerns that the repu- tation of the industry is "still in that mess" but he hopes the sec- tor has reached a "transforma- tive" tipping point. How far has the energy indus- try come in the past five years? One of the first meetings I did when I joined Which? was with a group of suppliers, Number 10 and Ofgem about the reputa- tion of the sector from the point of view of consumers and what could be done. "I remember saying, unless the sector gets its act together, it is about to get into a real mess. It gives me absolutely no pleas- ure at all to say that five years later we are still in that mess in terms of reputation with con- sumers. But I do think that most of the suppliers have completely understood now they've got this huge job on their hands of trans- forming the sector from a tech- nical, engineering-led, boring utility to one that is built on the customer, innovation, customer service and data. What has bought on this realisation? It's been five years of relent- less media, political, regulatory, consumer, campaigning pres- sure and the fact that a lot of the more bullish industry leaders that were around when I started, who at least publicly appeared to deny there was much wrong with the sector, have largely been replaced by more consumer-cen- tric people. The sector has got to a really interesting and poten- tially transformative point. There is no longer any debate about the need for change, or the need to put the consumer at the heart of the industry. The question is only how quickly and how to do that. Has the government backed that consumer agenda? I've lost count of how many times energy advisers at Number 10 and the prime minister have, from the start of the coalition government through to now, said they understand the trilemma problem of sustainability, secu- rity of supply and affordability. For much of the past five years, some of the political pres- sure has come off the industry with the CMA [Competition and Markets Authority] investigation because politicians are wait- ing to see the outcome. But the energy market and how it has impacted consumers has been higher on the agenda over the past five years than I can remem- ber for a very long time. How big an impact would the current CMA provisional pro- posals have? It's on course to be a fairly damp squib. There are some interest- ing and useful ideas in there but where the CMA has got stuck is in proposing a whole range of ways in which consumers could be encouraged to engage in the market, but none of those are tested and can't be tested in the CMA's timeframe. Aer two years, with the exception of what looks like a short-term piece of fairly short price regulation, con- sumers will wonder how much has changed as a direct result of the investigation. I'm not say- ing it's been a complete waste of time, but anyone who hoped it would be the investigation to reform the energy market for the foreseeable future would be disappointed. "I remember saying, unless the sector gets its act together, it is about to get into a real mess. It gives me absolutely no pleasure at all to say that five years later we are still in that mess." Is there anything you would change about your time in post? People will look back on this period of time and realise that we've wasted quite a lot of time as an industry, as a country, on working out a stable con- sumer-friendly framework and policy environment for energy. I hope that time-wasting is a thing of the past. A regret of mine is that there has been too much time spent arguing about whether there is a problem and not enough time hammering out solutions that work for the industry and consumers.