At the end of last year we were asked by BEIS to submit our thoughts on how we thought the energy retail market could perform better. We answered with four clear changes that we think could help create a competitive energy retail market that will drive the innovation needed to achieve our Net Zero Goals.
1. Remove the Price Cap
Removing the price cap is a critical priority for the market – the current mechanism is unsustainable. We think that Customers can be protected through more targeted mechanisms such as protections for certain groups of customers or better monitoring of suppliers’ prices.
2. Mandate smart meters for consumers
We need to bring the energy system out of the dark ages and into the modern era by digitising gas and electricity meters – the current roll out is not happening fast enough to enable the change needed to meet net zero targets.
At this critical point, we believe Government must take bold action to accelerate the uptake of smart meters. This includes taking away the choice for customers to refuse to have a smart meter installed, perhaps by mandating additional charges for customers who have chosen to remain on old style analogue meters. A majority smart energy system will then enable Half Hourly Settlement and the mass uptake of flexible products and services.
3. Revolutionise policy and regulation
The current focus on the bulk of regulation falling on energy retailers is outdated with the supply licence representing two decades of tweaks and patches.
The Government and Ofgem need to stop regulating the process and focus on setting the outcomes that need to be achieved, enabling a more dynamic form of regulation that will enable new and innovative business models. Ofgem could then move to regulating OUTCOMES and penalise companies when they are not achieved.
4. Move policy costs into general taxation
This will instantly smear the cost of policies across a far wider and more equitable base – and allow the costs to be based on income as opposed to energy use – a system which currently penalises the vulnerable.