A report to be officially launched tomorrow (November 1) reveals
that the electricity utility companies will need to transform to
avoid being superseded by new service providers and data
companies who will be better placed to serve consumers, and more
effective at optimising our future electricity system.
The report recommends that consumers will not need specific
energy regulation to protect them as energy will be an almost
invisible product bundled in with other home services from Alexa,
electric car providers and Local Authorities. Consumers will
however need much stronger consumer protection around their
personal data and across these bundled services.
ReShaping
Regulation, a report from , a former members of the
Energy and Climate Change Select Committee, Dr Jeff Hardy and
Professor Richard Green, Imperial College Business School, and
supported by the Energy Systems Catapult, paints a picture of the
long-term destination of the energy system and proposes a new set
of regulatory principles focused around the consumers, data,
markets and system security.
The four proposed regulatory principles are:
- A One-Stop-Shop Consumer Regulator: Regulate for how
consumers consume not how businesses are organised reflecting the
blurring and bundling of products and services.
- Optimise All Energy Assets: Regulate for system optimisation
to deliver the most productive, efficient and affordable system
changing the shape of the regulated market.
- Open Up Markets to More Players: Regulate to promote
transparent, cost-reflective and open markets to allow new
technologies and demand responses to compete with generation
assets.
- Understand where Risk Really Lies: Regulate for where
security of the system is truly at risk shifting from security of
supply to cyber and data security.
“For too long we have been talking about transition – we need to
be focused on the destination that is why this report is
“Planning FROM the Future” rather than mapping the world from
today”, says co-author .
“The regulation required to ensure that consumers are king in the
energy market, needs to reflect how we will be “consuming” energy
into the future, allowing for bundling of products, and
intermediaries like digital assistants Alexa or Google Home to
provide energy. This will create new winners and losers in the
market, new risks for consumers who will need less protection
from an invisible energy product, but with many more risks around
personal data. The old-fashioned utilities who do not reform will
find themselves under huge pressure from the growing number of
new services that are designed around consumers, ensuring that
consumers are market makers not market victims.”
Most importantly the report proposes a clean out of the old
policy obsessions, such as the Trilemma, fuel poverty and
security of supply as currently defined, that have dominated and
distorted policy making and regulation for too long.
“We believe that digitalisation, optimisation, innovative service
provision and new technologies will transform today’s
uni-directional flow of electricity from suppliers to passive
consumers, to a bidirectional, participative and optimised
system. We propose that regulation should be demanding more from
less, driving optimisation of consumer energy services for the
benefit of both consumers and the GB electricity system.” said
Imperial College academic and report co-author, Dr Jeff
Hardy.
“This requires changing the market structures and the roles and
responsibilities within the system, creating markets that are
open, transparent, cost-reflective, technology neutral and
focused on system optimisation. No-one knows what the future
holds for our low-carbon electricity system, so rather than
prescribing the solution, lets unleash the power of innovation
through simple, principle-based regulations.”
“If we are to unleash innovations that can transform the energy
system and drive economic growth, then we need to look across the
whole energy system – including regulation”, said Energy Systems
Catapult chief executive Philip New.“By encouraging radical
thinking we’re aiming to inspire innovators to open new markets
that put consumers at the heart of the energy system.”
The report drew on lessons from other sectors, from food to
banking, on how new consumers will consume, and how new markets
underpinned by data can work.
This report shapes a future destination and will be followed by a
roadmap that will describe the journey from where we are today to
the future with strong consumer regulation, new market design and
new policy imperatives.
The report
can be downloaded here
Notes for editors:
1 For further information please contact: on 07980 595861
2 is CEO of Challenging Ideas,
former MP and former Member of the Energy and Climate Change
Select Committee
3 Richard Green is the Alan and Sabine Howard
Professor of Sustainable Energy Business. He is Head of the
Department of Management at the Imperial College Business
School. http://www.imperial.ac.uk/people/r.green
4 Dr Jeff Hardy is a Senior Research Fellow at the
Grantham Institute – Climate Change and the Environment, Imperial
College London. http://www.imperial.ac.uk/people/jeff.hardy
5 The report was supported by the Energy Systems
Catapult and UK Power Networks.
