Issue link: https://fhpublishing.uberflip.com/i/936447
NETWORK / 31 / FEBRUARY 2018 Views from the speakers: Pamela Taylor, partner, Ofgem: "There are lots of companies trying to figure out how to deploy new technologies and business models, but what we're not seeing a lot of yet is the next stage – actually looking at regulatory frameworks and how it would all work in practical terms. There are plenty of new models that don't have the supplier at the centre too, which is interesting." Kelly Butler, marketing direc- tor/deputy CEO, BEAMA: "You have to build a system around the passive consumer, because the majority of people just don't care. A targeted, regional approach is the key. But if we aren't reactive now, we'll still be sitting here and discussing this same thing in five years' time." Will Humphreys, heat strategy policy lead, BEIS: "It would be interesting to see new players in the energy service market, but however we proceed, we do need to think about equalising services." Ian Rose, professional services director, Passiv Systems: "How will energy market regulation support new energy services? How do you split out the heat? Do we need to split out the whole energy supply? That would change the whole market." Brought to you in association with idea would face: "The challenge is this isn't a normal commercial market. We need a mechanism to reduce market distortion and a new long-term framework – we need long-term confidence in place." Previous emissions reduc- tions have been relatively sim- ple, cheap and have delivered clear benefits to households. But this, and other such options currently available to make fur- ther reductions, would require households to endure more initial disruption for less obvi- ous long-term benefits. Further- more, John Farrington of EDF said policy makers are likely to be reluctant to force changes in people's homes that are consid - ered widely unpopular. He said: "I think we have to work in a way that we never have before. We need an inte - grator, and they don't neces- sarily already have to be in the supply chain. They must be re- sponsible for bringing the right assets and components – and find which combination gives the best effect at the lowest cost. We need to move to an aspira - tional space, because there's no willingness [on the part of consumers] to pay at present." Appealing to consumers It was agreed that we need to develop ways to reduce emis- sions from domestic heating that are more appealing to con- sumers, thereby making the transition to low carbon heating much easier to deliver in prac- tice – and the time to do this is now. Furthermore, any low carbon solution would need to be underpinned by sound engi - neering; high quality design; appropriate technical, consumer and economic regulation; and financially viable business models. But the problem is something of a chicken and egg situation, in that retailers could evolve their business models to open a more customer-centric ap - proach to decarbonisation, and low carbon heating product companies could develop more Key points l The right carbon-friendly system to deploy is heav- ily dependent on existing network and building factors – there is no one-size-fits-all solution. l There are around 26 million homes that have relatively poor thermal performance, and over 90 per cent of them are still expected to be in use in 2050 – it's not just about new-builds. l There is currently no point of integration for heat, but re- tailers have an opportunity to evolve their business models towards becoming that link between the customer and the supply chain. l There is an opportunity for a lead contractor in the heat network space, and this needs to be filled to make energy services happen ef- fectively. But energy suppli- ers and technology providers don't currently see this as an opportunity. l We need to address this as a matter of urgency to have any hope of meeting future carbon budgets. customer-centric mainstream products – but neither is likely to invest without some confi- dence a suitable policy regime is on the horizon. The remaining discussion was then rooted in how policy would first have to be in place for the industry to be best placed to react accordingly. When it comes to heat, the table noted government has a major challenge – if they could guarantee the performance of new services, so as to build the customer's trust that expecta - tions can and will be met, then retailers could play a high value role in enabling decarbonisa- tion and, in the right policy environment, do so profitably, in the same way that low carbon car manufacturers are already doing.