Consumer groups, green groups, regulators and politicians have all had their say. Indeed, the sector has never been short of people with strong opinions.
There will always be debate, and rightly so. Opposition and critique should bring compromise and hopefully improvements to legislation, regulation and practice.
Unfortunately, it seems to me this is not always the case.
Renewables energy policy under successive governments has led to boom and bust in solar PV, with subsidies that were perhaps initially too generous and then ruthlessly cut – leaving a sector in disarray.
Investment in wind is currently being undermined by the continued tussle between rural sceptics and green enthusiasts. Although others will undoubtedly disagree, perhaps the wind lobby has not done enough to engage local communities so that they both understand the technology and share in the benefits of development.
And recently we have once again seen rising energy prices, which have sadly led to knee-jerk political announcements by politicians of all colours.
As an industry, we perhaps need to share the blame because accusations of mis-selling, erroneous billing and rising prices have eroded customer trust. On top of that, industry has failed to effectively defend its profits, despite many of us believing these are modest in comparison with investment needs over the next two decades.
As I approach my 40th year in the industry, I am at least entitled to a view as to what the industry needs to do in response.
First, companies need to be more transparent about what they’re doing.
Why do we wait for government or the regulator to tell us what to do before we grab hold of the initiative? We should have acted much quicker and more effectively in areas such as selling and billing when we knew we had problems. Yes, we did things in the domestic area, but why have we taken so long in the business sector?
My plea to all energy companies is to go further, faster. The Retail Market Review (RMR) looks like it might force companies’ hands on a range of issues from limiting the number of tariffs per supplier, to requirements for an annual statement. But it is a shame that it has come to this.
Worryingly, it may not be enough. Climate change minister Greg Barker maintains that the government intends to go further than Ofgem’s RMR proposals. Mandatory tariff switching seems to have been ruled out, but what will take its place?
It remains to be seen whether the forthcoming proposals will encourage or decimate competition. But the threat is real, either way, and no company enjoys political risk – especially when trying to convince boards of directors to make long-term investment.
Second, industry needs to balance competition with common messaging. The creation of Energy UK demonstrates that much of industry recognises this challenge. But we have to hold our nerve and possibly even suppress our competitive natures for the greater good, although this may well have some interesting Competition Act implications.
Whether we like it or not, energy is, was and always will be a political football because it touches every home and every business. But industry shouldn’t look to government to sort out these issues on its own. It needs to take responsibility, speaking with one voice on issues such as price and being more transparent with customers over billing.
Greater credibility and consistent messaging will put energy firms on the front foot – able to win the arguments that matter to their bottom line.
Duncan Sedgwick, chairman of the energy practice, Westbourne Communications
This article first appeared in Utility Week’s print edition of 7th December 2012.
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