The way in which consumers engage with the energy market is transforming before our eyes, and the pace of change looks set to become even more dizzying in the coming years and decades.
From heat networks to electric vehicles (EVs), smart cities and half-hourly settlement, innovation abounds.
The four Ds of the energy transition – decarbonisation, decentralisation, digitisation and democratisation – mean the market we know today will be unrecognisable in 30 years’ time.
Traditional boundaries will become blurred, and new products and services will emerge with the potential to create a more positive and confident consumer relationship with the market.
Protections and safeguards
Of course, when it comes to the (typically unregulated) new products and services that will power the energy transition, consumers will need to have the confidence to embrace them – knowing that there are protections and safeguards in place and that they have somewhere to turn for help if something goes wrong.
The fact is that in these unregulated areas, there simply isn’t the wraparound consumer protection – comprising advocacy/advice, regulation and redress – that you see in the more traditional, regulated parts of the market.
In the heat networks space, for example, the Heat Trust has done some good work, but because it’s a non-mandatory membership body not all heat network customers benefit from the same level of protection.
Green homes for all?
Domestic energy efficiency has been high on the news agenda recently, thanks to the launch of the government’s Green Homes Grant.
As laudable as this scheme is, the same questions persist over consumer protection. It remains to be seen whether the insistence on TrustMark registration for those wishing to complete work under the scheme, alongside other accreditation criteria, will be enough to ensure high standards.
For me, in an ideal world, homeowners taking advantage of the grants on offer would have comprehensive, 360-degree protection – including guaranteed access to free, independent redress if things go wrong.
As Dr Peter Bonfield noted in his 2016 Each Home Counts report, the picture in the domestic energy efficiency and renewable energy space is often confusing and lacking when it comes to consumer protection. Indeed, I’d argue that the picture has become even more complex and fragmented since then.
Engaging with confidence
The call by Citizens Advice for a Net Zero Homes Guarantee is therefore something I’d welcome. This would be a government-backed scheme focused on “giving people confidence to install low carbon heating systems or energy efficiency measures.”
Citizens Advice says the guarantee would “help people to make informed decisions, and establish simple, enforceable, protections, so people can engage with confidence.”
In other words, exactly what’s needed if the government is to get a good return on its investment and homeowners who use the scheme are to enjoy the warm, energy-efficient homes they need and deserve.
Supply and demand
These are exciting times for the energy sector. We’re seeing change and innovation on an unprecedented scale.
A lot of the change that’s either happening or being talked about currently is focused on the supply side. I’d argue that more thought needs to be given to the demand side – specifically generating consumer demand for new products and services that’s needed to pay for all of this investment and help make the vision of the 4 Ds a reality.
That’s where consumer protection comes in. For me, giving consumers the confidence to step into the brave new world of unregulated, cutting-edge energy services is vital to unlocking demand.
One way of embedding this confidence is to ensure that protections, including access to advice and redress, are in place wherever possible.
In our role as the Energy Ombudsman we feel we have an important role to play in giving consumers trust and confidence to engage in this new frontier. It’s a role that we are determined to fulfil for the sake of consumers, the companies that serve them and the energy transition that needs to happen for environmental and economic reasons.
After all, a low-carbon economy needs to be a high-trust economy.