In terms of energy and investment in infrastructure it was perhaps a quieter Budget. The long-awaited Carbon Price Floor (CPF) post-2020 was once more paused upon. Industry needs greater clarity about the long-term direction of the CPF, but we do recognise this might be difficult to provide with the UK’s membership of the EU ETS post-Brexit unclear.
It was also announced the Levy Control Framework (LCF) will be replaced. Energy UK called for these reforms ahead of the Budget and it is therefore positive to see Treasury taking these views on board by reviewing other mechanisms to manage budgets for low carbon spending in the future. In any future reform three main objectives should be considered for what is vital future low carbon investment. The first is to provide long term transparency regarding the cost of low carbon generation schemes. The second is to encourage investment by providing future visibility of the government’s investment commitment for new low carbon generation, including both mature and innovative technologies. Finally, it is essential to understand what the total cost of the schemes will be to consumers.
Additionally, the Spring Budget gave us an indication into the Consumer Green paper, and while we eagerly await its contents, improvement and progress is being made in the right direction. A healthy market has a number of clear indicators.
Switching figures have risen year on year for the past three years and it is fantastic to see the latest figures for February rise to 415,599, and indications are that internal switching is seeing twice the number of customers make a change with their existing supplier.
Conversely, we have seen complaints go in the opposite direction, falling year on year where companies are striving and competing on customer service, with the latest figures in 2016 showing around 3.5 million complaints.
Suppliers are more than aware they need to be proactive in communicating tariff information to all customers. They are continuing to trial the best ways in which to engage and will drive and implement the CMA remedies.
Retailers are constantly looking at ways to differentiate themselves and appeal to new customers, through new innovation in services and products being launched.
Furthermore, there are now more than 50 suppliers active in the market, so the choice for consumers is there and we are determined to make it as easy as possible.
However, it must be made clear, this is in no way a sign of complacency, there is lots of work to be done by all and working together from the trade association to government to the wider public is the best solution for all consumers.
The industry is committed to ensuring the market works for all, particularly low income or vulnerable customers. The industry spent £320 million on help for vulnerable/low income consumers in 2016 and launched new prepayment principles to provide improved safeguards for prepayment customers. These principles, coupled with the rollout of smart meters, will improve the experience of prepayment customers and give customers more control over their energy usage and bills, allowing them to both save energy and money.