What do consumers want from the future energy market?
With digitalisation driving possibilities for new services and efficiencies, it is important to consider what consumers want from the future energy market, the subject of the panel I chaired at Energy UK’s Annual Conference last week. Greg Jackson, CEO of Octopus Energy summarised it as “consumers knowing that they are not getting ripped off”.For him it was about energy companies working hard to give consumers a good deal rather than the other way round. He thought the sector could learn from the supermarkets where prices were transparent and it was easy to shop around. Having recently taken over as Independent Chair of the Energy Switch Guarantee, an initiative set up to make switching supplier simple, speedy and safe, this got me wondering about the role of making switching easier given the more profound changes we might see in the market.
The number of consumers switching supplier has actually risen – with a record 5.5 million customers moving to a new supplier last year. Yet with many consumers still on higher standard variable tariffs and not taking advantage of lower competitive rates, the Government has asked Ofgem to introduce a temporary price cap to protect them. If we no longer expect consumers to hold suppliers to account by switching, this begs the question of how the relationship between suppliers and consumers will work once the price cap lapses.
Natasha Hobday, Director of Regulation at First Utility suggested that we needed to distinguish between what we want as ‘energy consumers’ (good service at the lowest price?) and as ‘citizens’ (fair access to affordable energy for all?). This might lead us to a different energy market in the future, which might offer a default basic energy supply with competition for more innovative products and services (e.g. to charge electric vehicles or enable our connected homes).
As Joanna Elson, CEO of the Money Advice Trust, pointed out with a rise in households unable to cover the essentials, one in six unable to pay bills and more of us than ever working two jobs, it is more important than ever to ensure that whatever future we move towards, it protects the vulnerable. The Energy Switch Guarantee – which covers over 90 percent of the retail energy market – is now kicking off its own review of the future and how it can best meet what consumers want.