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Demanding attention: Managing risks with demand-side response, to improve consumer experience tomorrow

19 January 2021

Demanding attention: Managing risks with demand-side response, to improve consumer experience tomorrow [ 1.6 mb]

The evolution of the energy retail market is a core element of the UK’s transition to net zero. As we decarbonise how we travel, how we heat our homes and our energy generation, it’s likely we’ll see increasing adoption of electric vehicles, heat pumps, solar and storage and smart domestic appliances. These products might mean we need to increase how much electricity we produce but they also offer new potential to be ‘flexible’ with how and when we use it. For example, using more electricity when renewable generation is high. Doing so will help us maintain energy system resilience in a cost effective way, reducing costs for energy bill payers.

It’s possible companies will offer consumers services to help them use electricity flexibly, balancing the grid whilst using smart controls to cater to the needs of their customers. Many companies, including members of Energy UK (EUK) and the Association for Decentralised Energy (ADE) are already offering such services, whilst innovation in the market continues to broaden what those services could look like.

Citizens Advice's vision of the future energy market is one that is: inclusive by design and recognises the essential nature of energy supply. It should facilitate and encourage innovation, be accessible by all and treat everybody fairly, regardless of their circumstances.

To achieve this, it is vital that the market is proactive in identifying any gaps in consumer protections as these propositions become more popular. Given the critical importance of this developing market and the high potential for innovation, we need to ensure that we are delivering positive consumer outcomes that enable and encourage others to make the transition to low carbon. This report therefore seeks to provide insight into areas of consumer protection most relevant to this evolving set of propositions, with a broad analysis of how far existing policy and legislation addresses these areas. Some of the risks highlighted in the report are expected to fall away as rewards for participation are established, whilst new risks may emerge over time as the market changes or more evidence becomes available of potential harm.

Many independent energy retailers and independent aggregators are conscious of ensuring positive outcomes for consumers. EUK, ADE and Citizens Advice have set out in this report a series of different approaches to energy services to identify any gaps in protections. This is the first step in delivering these benefits to consumers as we continue towards net zero.