Citizens Advice is fighting for innovation that enables a consumer-led transition
We know that consumers will need new energy technologies and services if we are going to reach net zero. That means innovators designing offers that deliver equitable outcomes for all consumers. It’s the only way we’ll deliver the ambitions around changing our homes and the way we use energy.
To support the development of these innovations, energy networks are being funded to work with partners to tackle strategic challenges set by Innovate UK and Ofgem as part of the Strategic Innovation Fund (SIF).
As the statutory advocate for energy consumers, Citizens Advice has been supporting Innovate UK in developing a SIF challenge that encourages networks to pursue innovation that will enable more consumers to better benefit from trends in digitalisation and low carbon technology. This means that SIF bidders can enable inclusive projects that reach diverse customer groups.
Workshop
We recently brought together energy, water and telecom providers and a group of charities, local representatives and innovation experts at a workshop in our London office. The event heard about the current and future consumer experiences and opportunities for innovation.
The attendees generously gave their input to the session aimed at stimulating collaboration in tackling this challenge. From their feedback, we have drawn out some themes from the discussion. We have categorised these as:
- We need improved tracking of diversity in energy consumer needs
- We need to enable the scale and pace of the energy transition
- We need to better target tailored network services
- We need to prioritise tackling areas of significant consumer detriment
- We need to remove barriers to flexible energy use
1. We need improved tracking of diversity in energy consumer needs
Several attendees highlighted the importance of developing a more joined-up process to identify the common challenges consumers currently face in their energy services and how this will change in the energy transition. This was argued to support more agile, efficient and complete network service solutions aligned to consumer needs. Possible opportunities to pursue this outcome included: better use of consumer data, consumer mapping, easier self-reporting of consumer preferences and requirements, as well as more collaboration across utilities, retailers and public services.
Participants discussed the importance of recognising and monitoring the transience of vulnerability and monitoring the evolving map of where the vulnerability exists. There were numerous suggestions about how to build towards creating a more collaborative and trusted picture of where consumers have barriers to accessing a service, whether by region, community or by other characteristics. Development in this area could enable services targeting more equitable energy outcomes including more standardisation of inclusive customer interfaces. It was suggested that more representative consumer trials with realistic service offers would help guide the pace and direction of the transition. Another proposal to tackle the challenge was a collaborative industry barometer of consumer attitudes and needs.
To track what is needed to respond to consumers’ energy service needs, delegates highlighted the importance of ongoing market monitoring to understand the extent to which networks and markets provide inclusive offers. Alongside a good understanding of consumers’ needs and preferences, it would then be possible to better ascertain where further interventions by networks are necessary to address barriers to the benefits of the energy transition.
2. We need to enable the scale and pace of the energy transition
It will be challenging to track the fast-evolving diversity in energy consumer attitudes and needs during the energy transition. However, it will also be increasingly valuable for service providers due to the required scale and pace of change which actively listens to consumers.
Several participants raised how the government’s proposed transition to more efficient low-carbon homes is highly ambitious. Particularly for improving energy efficiency improvements and the decarbonisation of heat. This means that a key area for innovation was seen to be anticipating the education and behavioural barriers that can limit consumer trust and uptake of demand and carbon reduction schemes. It was also highlighted how energy advice and support will need to be more holistic and joined-up to aid the simplicity of a consumer journey and make it more accessible.
To ensure that consumer attitudes and behaviour will deliver the level of change required there were numerous suggestions about how to improve the inclusivity of consumer engagement in the transition. These include school and consumer education, using local groups, public awareness campaigns and local advice and support services.
3. We need to better target tailored network services
It was argued that there needs to be clarity about what a consumer becomes vulnerable ‘to’ if their energy needs aren’t met. These detriments occur when energy barriers restrict access to essential health, heat or transport services. It was suggested that clarity on the types of actions that consumers can expect from utilities to address barriers was argued to be a helpful step. This might be through a common set of reasonable adjustments to make service design accessible that help consumers understand their entitlement without having to report the nuance of the reasons that they need an additional measure to overcome a barrier to access. This was suggested to make the identification process less stressful and time-consuming for consumers, therefore reducing barriers to support.
There was a strong emphasis throughout the session on the better use of consumer data to support the provision of support that addresses accessibility barriers. Some delegates talked about the opportunity of regional utilities working together to better track and target consumer support to individuals.
There was a lot of discussion throughout the morning about the limitations of existing tools including the priority services register (PSR) and the need for better awareness of demands for reasonable adjustments. Tools such as smart meter usage data and AI were suggested to help utility networks make judgements about where detriment for consumers in their energy service or where it is likely to occur in the near future.
The monitoring of individual smart energy meters or water meter habits were proposed as options that with better data access could enable networks to avoid instances of high consumer detriment. It was also discussed how barriers to smart meter data are restricting access to innovation opportunities and ways to overcome this should be explored.
It was suggested that local and trusted entities have a key role in understanding consumers’ experiences and expectations for well-being, ascertaining vulnerabilities and accurately representing a consumer’s experience.
4. We need to prioritise tackling areas of significant consumer detriment
In an emergency, such as a power outage during a storm or when a consumer is returning home from a hospital, an energy network’s direct response or the use of their service might help support consumers. Several options were discussed to better support consumer service and minimise the risk of significant consumer detriment in these scenarios.
There were several proposals about how transport, water treatment and waste networks could be better integrated into the energy and heat networks to create a more resilient grid. This was seen as particularly valuable in rural areas with more limited grid capacity.
If an outage occurs, it was discussed how consumers face challenges when communicating the issue with their network if they do not have access to a communication service such as a working mobile or landline. The risk of this occurring will significantly increase in an outage as communication services are increasingly dependent on mains electricity.
A suggestion was made to prioritise the provision of electricity after an outage to communication services that will enable more consumers to flag their issues. It was also questioned why the smart meter’s last gasp signals will not provide networks with the data they need to establish outages. Another option discussed to facilitate the reporting of outages was to broaden the use of 105 services to be accessed like a 999 call — which utilises any available mobile network rather than your provider.
In storms, there is a high number of contacts to networks from consumers. A proposal to address this was to require networks to provide greater detail on outages so that media, care and advice support providers or friends and family can access information that helps reduce the number of consumers needing to contact networks for information.
Alongside responses to a network emergency, a network might also help facilitate a response to an individual’s additional care needs. Such as when returning from the hospital a patient may face additional barriers such as affordability which create complexities in care or the risk that not heating their home creates additional health risks. One proposed solution was an option for doctors to prescribe warmth and add credit to home heating to ensure a consumer’s health is protected.
Another area where network awareness may support consumers in an emergency is fire safety and emergency response. The information held on consumer vulnerability, home appliances and isolation options and whether consumers are in a high-rise property would be information that would enable a more joined-up response from emergency responders.
5. We need to remove barriers to flexible energy use
To reach net-zero most efficiently requires a critical mass of consumers to better optimise their energy consumption to reduce costs and carbon emissions. This can help consumers receive cheaper and more manageable bills. However, understanding the services and cost of installs present significant barriers to entry. To address this will require service propositions that provide equitable outcomes for all consumers.
Technology and services that facilitate the choice and use of flexible energy services and technologies in consumer homes can help consumers and service providers to better ensure energy consumer needs are met. These include time of use tariffs, energy efficiency, heat pumps or home sensors such as thermostats or interactive displays like smart meters. It was discussed how making flexibility easier or even automated with installs set to sensible defaults will help consumers. Automation will also help the grid to rely on consumer flexibility to balance the grid.
One of the key concerns was the affordability of technologies such as heat pumps and solar and it was argued that upfront costs present a barrier to access. There were several discussions about how to support inclusive access to finance and reduce costs. One proposal was to support local initiatives to tailor local energy supply and group buy home energy service initiatives. For example, getting consumer views and buy-in on local network balancing options and collective buying schemes on technologies such as heat pumps or insulation.
It was highlighted that better monitoring of energy technology performance through sensors in homes can enhance the accountability to networks and consumers about the value they provide. Better accountability will enable both networks and consumers to have more confidence in investments in homes as worthwhile investments.
Next steps
The event was a chance for those engaged with consumer experiences of energy or with other utility networks to think about which opportunities for projects and trials could best support the energy transition. As the demands of the transition on consumers gradually become clearer, innovation programmes must be as closely aligned as possible to the pressing challenges that consumers face.
Citizens Advice will be continuing to work with stakeholders and researchers to represent the attitudes and needs of consumers to policymakers, regulators and funders to guide the objectives that a consumer-led transition must focus on.
