Last week, Samuel Van Arnold from our strategy team attended the Energy UK annual conference. Here’s what he had to say about the incredibly timely event and some of the themes that were discussed;
In light of increasing turbulence in energy retail across the UK market, I was eager to see what some of the key industry figures had to say about the future of the retail market – particularly as there were some hints that Ofgem might make an announcement about changes to the price cap.
The day kicked off with the opening by Energy UK’s CEO, Emma Pinchbeck, who laid down the gauntlet to BEIS and Ofgem. In a compelling address she talked about how the future of energy retail was at stake, and the industry needs clear guidance and support to get ‘out of the mess’ it currently found itself in. This was a call to arms for clear policy direction that would enable the industry to move forward towards a net zero future – and she resisted the urge to say ‘I told you so’ when Energy UK had been predicting these kinds of issues for some time.
She was followed by the Energy Minister, Kwasi Kwarteng, who said nothing new, and simply repeated the government’s favourite phrases – ‘we won’t bail out badly run energy companies, we will protect consumers, and the market needs to remain competitive’. But with little policy guidance as to how this circle can be squared, the audience remained in the dark!
Jonathan Brearley, CEO of Ofgem, gave the industry the most to be hopeful about with a suggestion that the price cap mechanism might be open for review – but with little idea of timings there wasn’t an immediate sense of relief.
The panel discussions also touched on a few key points – namely that the industry desperately needed clarity if it was to drive the innovation needed to deliver net zero by 2035. Competition is key to achieving that goal, as well as a sense of policy certainty. To repeat some of the themes from the Future of Utilities event last month – collaboration between industry, regulator and government is key to ensure that we continue to drive towards the energy transition at pace.
Overall, the conference really demonstrated the critical requirement that solutions can’t be a ‘one size fits all’ – consumers, innovators and investors aren’t all the same and need different incentives and levels of protection. The Government needs to allow for flexibility, not prescription in both policy and regulation to enable the delivery of a successful energy future.