Vulnerable customers should be protected against the rapid pace of changing technology, a report by Citizens Advice has found.
According to the charity, the energy market is in need of “radical reform” as the need for decarbonisation accelerates the rate of change.
“There is a real risk that those that can’t engage with the future retail energy market will face paying a disproportionately high burden of decarbonisation costs. Without a retail market that works for everyone, it won’t be possible to have a just low-carbon transition. There is a need then for protection to ensure the market works for everyone”, the report states.
The report looks at how new ways of purchasing gas and electricity, such as by being able to trade power locally, agreeing to a fixed price for a set level of comfort, or getting a better deal by only using appliances at certain times, will affect those in vulnerable situations.
Specifically, it identifies three barriers for people trying to access energy technologies:
- Upfront costs: some future energy services will involve installing new equipment like battery storage, an investment too expensive for many people
- Digital exclusion: 5.3 million British adults are not online. Many more don’t feel confident in using apps and websites
- Lack of trust: people are wary of appliances like smart meters accessing their energy data.
In order to tackle this, Citizens Advice has highlighted its four key principles for the future energy market. These include:
- Enable all consumers to choose from a good range of supply models
- Make information about products and services transparent and accessible
- Protect vulnerable consumers and ensure people are not penalised for loyalty
- Put consumers in control of their energy outcomes
It further adds practical ways to achieve these principles. These include the government providing grants and low-interest loans for new energy technologies as well as offering non-digital ways of signing up for the 5.3 million adults who do not use the internet.
Gillian Guy, chief executive of Citizens Advice, said: “The government’s recent adoption of a net zero carbon emissions target means big changes in how we access energy are on the way.
“New innovations in the way we heat and light our homes will bring benefits for many. The danger is that some of the most vulnerable in society end up excluded from these exciting developments.
“How much you earn, or whether you’re confident with a smartphone, shouldn’t prevent anyone from getting the best out of this rapidly evolving market.”
In response to the report Matthew Vickers, chief executive at the Energy Ombudsman, said: “The shape of the energy market is changing due to the emergence of new technology and new services. It’s important that all consumers share the benefits of this transformation.
“We agree with Citizens Advice that effective consumer protection is vital in order to encourage trust and engagement in these new services.
“The challenge is to make sure there is easy access for all to advice and protection beyond traditional regulation and consumer protection.”