Stuck in the Middle
As we move to net zero, third-party intermediaries will become even more important to the energy market. It’s vital to put in place the right regulation to protect consumers using these services.
Reaching the UK's net zero goal will have major implications for the people we help everyday. Third party intermediaries (TPIs) are just one area where technology and data are having a dramatic impact on how people use energy. They can help us decarbonise and give people more choice. But they can be confusing when things go wrong.
Our previous research has outlined that public support will be crucial for a successful transition to a low-carbon future.2 One way the government and regulators can build public trust is by tackling the net zero regulation challenge: to ensure people have the confidence to engage in the market and that no one gets left behind.
TPIs play a key role in energy, acting to simplify a complex market and increase engagement. They range from helping consumers choose an energy supplier to making decisions on a consumer’s behalf, like selecting their supplier for them.
Despite their important role there is no direct regulatory oversight of energy TPIs, and consumers can struggle to resolve problems when they arise.We expect TPIs to become even more prevalent in the next 5 years, playing an increasingly sophisticated role in delivering a net zero energy system:
New schemes to increase consumer engagement could mean millions more using services powered by TPIs
Energy usage data will be opened up to enable personalisation and better recommendations, including for low-carbon energy products.
TPIs will help manage smart appliances and electric vehicle charging to minimise costs and allow more renewable energy on the energy system
At Citizens Advice, we already see cases where TPIs aren’t transparent about their service, where consumers are switched to inappropriate products and where they miss out on protections, with very little recourse.
Poor practices by some TPIs will undermine consumer trust, while a lack of regulation may allow energy suppliers to lock innovative TPIs out of the market.
The government is preparing to publish its forthcoming energy white paper. It must take this opportunity to introduce a proportionate and flexible regulatory approach for TPIs. This would enable positive innovation for consumers, alongside support and access to redress when things go wrong.
The research the report is based on is available here: