Utility Week

Customers 26 | 9TH - 15TH FEBRUARY 2018 | UTILITY WEEK Conference Utility Week Energy Customer Conference Thursday 18 January, Birmingham Energy must raise its game Industry experts came together at the Energy Customer Conference to discuss what companies, regulators and the government must do to meet the challenges facing the sector. Clare Ruel reports. L ast year was a challenging year for the energy sector. The price cap announce- ment dominated the headlines for energy retail companies, while the energy networks found themselves under scrutiny over supposed "excessive profits". And 2018 doesn't look set to be any easier. Questions continue to circle the legitimacy of the sec- tor, market conditions are making life diffi- cult for smaller suppliers, and Brexit is only going to have a greater effect. It was with these challenges in mind that industry experts gathered at Utility Week's Energy Customer Conference in Birmingham, sponsored by Oracle, on 18 January. To adapt to the changes going on in the sector, Ofgem has warned that the way it reg- ulates companies needs to transform. Ofgem partner for consumers Anthony Pygram told delegates that the regulator needs a "more agile framework" for regulation, one that is flexible to market conditions. "Vulnerability" was the word of the day. Much debate has surrounded the definition of vulnerability, with Ofgem defining it as when a consumer's personal circumstances and characteristics, along with the market, make them less likely to protect or represent their interests in the energy space. These growing concerns around vulnerable cus- tomers are beginning to instigate major shis in the sector. A price cap for the entire market is on the way, but Ofgem has already introduced an enforceable vulnerability principle, under which suppliers are expected to ensure the fair treatment of vulnerable customers, as well as provide a safeguard tariff to protect prepayment customers receiving the Warm Home Discount. However, Pygram warned that the regu- lator does not currently have appropriate regulatory structures to cover the increasing influence price comparison websites, aggre- gators, energy management advisers and new strains of suppliers have in the market. Technological advancements and the increased use of data were also key discus- sion points at the conference. This includes the rollout of smart meters. Many in the industry believe mounting technical and procedural problems with this programme will come to a head this year. The govern- ment has already pushed back the concrete deadline for the transition to SMETS2 meter- ing, while continuing to insist that a series of delays to different parts of the programme will not affect the overall deadline of offering meters to 26 million households by 2020. Speakers agreed smart meters will be a "key enabler" to customers gaining ultimate control of their energy use. Energy UK direc- tor of retail supply Audrey Gallacher argued that they will have an "enormous impact" on the market. If the rollout of SMETS2 meters is achieved, one thing they will bring is more customer and consumption data. This is a good thing, as long as the data is properly analysed, and the information extracted is fit for purpose. Energy companies, regulators and gov- ernment alike must "raise their game in two important respects regarding data", according to Chris Harris, head of regula- tion at Npower. Namely, taking a "joined- up approach across the utility and policy landscape"; and "making a commitment to improve data", especially where it is shared or transferred between users. The digital customer landscape is driv- ing change in the energy sector. The "digital customer" wants more from a utility, and the rise of social media has created a culture of "instant gratification". Octopus Energy chief executive Greg Jackson explored how to make energy work in a world of instant gratification, arguing that the speed versus certainty trade-off was "meaningless to consumers". "You can't have certainty without speed, you can only have as much certainty as you've got speed, you can't be certain until it's done," he said. The industry can be in no doubt that the year will bring with it many challenges as the sector continues to transform. It will be up to energy companies to meet those chal- lenges head on, or risk being outrun by their competitors.

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