There will be no real product innovation in the energy retail market until the current massive level of government support is withdrawn, Keith Anderson has said.
The Scottish Power chief executive told a fringe event at this week’s Conservative party conference, organised by the Social Market Foundation thinktank, that government support was likely to inhibit any moves by companies to develop products, such as new time of use tariffs.
He said: “There’s a little bit of a hiatus in the market, because in effect, everybody is going on what is a bog-standard variable tariff with fixed unit rates.
“You aren’t going to see any real product innovation in this market. If this carries on for two years and the support mechanism stays, you’re going see little innovation in the market because there’s no competition and no variation in how you use the power.”
But if the market returns to more normal conditions, interest in time of use tariffs will revive, Anderson said: “Once we get back to the normal world that will absolutely happen. Time of use tariffs will be another fantastic way of doing this.”
Responding to Anderson’s comments at a later fringe event, organised by right of centre thinktank Onward, Conservative MP Alexander Stafford said subsidies are “destroying” innovation in the energy retail market.
“Throwing more money alone” was not the answer to the problems in energy, he said: “Of course the government had to and did step in to help. Subsidies are very good but they’re not a long-term solution.
“In the short term, it is incredibly important to help people but that’s not the long- term solution or that’s only a stopgap until we can get through this and we have to get through this quickly.”
“We cannot just subsidise our energy system to get us out this problem,” he said, adding that long-term solutions would be delivered via technological innovations.
Stafford, who worked for Greenpeace before becoming Conservative MP for the Yorkshire seat of Rother Vale in 2019, said the government has to be “very careful” about how long-term support is maintained.