Protection for customers must keep pace with rapidly evolving energy supply market says Citizens Advice

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Protection for customers must keep pace with rapidly evolving energy supply market says Citizens Advice

Friday 19 July 2019

Citizens Advice says radical reform of the energy supply market is needed to protect customers as new technologies are introduced in a fast-changing industry.

The charity, official consumer watchdog for energy, warns customers in vulnerable circumstances are particularly at risk as the need for decarbonisation accelerates the rate of change.

In a new report looking at how we access gas and electricity, Citizens Advice says new ways of buying energy will be increasingly available to householders and small businesses.

These could include consumers being able to trade power locally, agreeing to a fixed price for a set level of comfort, or getting a better deal by only using appliances at certain times.

Citizens Advice argues that with its local offices already helping 80,000 people with energy supply problems every year, it’s vital consumer protection keeps pace with changing technology.

The charity says its research shows three main barriers for people trying to access the energy technologies of the future:

  • Upfront costs: some future energy services will involve installing new equipment like battery storage, an investment too expensive for many people

  • Digital exclusion: 5.3 million British adults are not online. Many more don’t feel confident in using apps and websites

  • Lack of trust: people are wary of appliances like smart meters accessing their energy data.

Citizens Advice says a forthcoming consultation document from the energy regulator Ofgem and the government, is an ideal opportunity to lay the groundwork for reforms.

The charity’s new report, Future for all, says the future energy retail market should be set up to reflect four important principles, and has suggested ways these can be implemented:

Gillian Guy, Chief Executive of Citizens Advice, said:

“The government’s recent adoption of a net zero carbon emissions target means big changes in how we access energy are on the way.

 “New innovations in the way we heat and light our homes will bring benefits for many. The danger is that some of the most vulnerable in society end up excluded from these exciting developments.

“How much you earn, or whether you’re confident with a smartphone, shouldn’t prevent anyone from getting the best out of this rapidly evolving market.”

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Government action urgently needed to protect consumers during the decarbonisation of heating, says Citizens Advice

Image result for decarbonisation of heating

Friday 12 July 2019

The lack of a credible plan to decarbonise the way homes and businesses are heated risks failing consumers and undermining public confidence, according to Citizens Advice.

The charity is calling on the government to close gaps in the regulation of decarbonisation innovations such as heat networks.

Heat networks are a significant part of the government’s efforts to reduce carbon. They are distribution systems of insulated pipes that takes heat from a central source and delivers it to a number of buildings.

While just 2% of households currently get their heating and hot water through a heat network, this will rise to an estimated 1 in 20 homes by 2030. By 2050, more than five million homes could be heated in this way.

In a report published today, Citizens Advice sets out the need to regulate heat networks and create a consumer advocate for heat network users.  Some of the common problems it helps people with include:

  • Billing errors – consumers don’t receive regular bills, which can lead to high ‘back-bills’ or incorrect bills

  • Standing charges – consumers are confused about standing charges and can feel unable to reduce heating costs because of high, and increasing, standing charges.

  • Lack of information – many people don’t understand how their heat network operates, how their bills are calculated, or where to turn to complain

The charity is warning that, because heat networks are not regulated, many more people risk being exposed to the same issues unless reforms are put in place.

Citizens Advice believes that problems experienced by heat network customers demonstrate the importance of managing the decarbonisation process properly.

Despite the immensity of the challenge, there is no credible UK-wide strategy to achieve the government’s decarbonisation targets – including how consumers will be protected as new innovations are introduced, and where the costs will fall.

With most of the costs to decarbonise the energy system currently paid for through energy bills, Citizens Advice is warning that those on low incomes could end up paying a disproportionate share of that cost.

To address this, the charity is calling on the government to:

  • Establish an independent commission to determine the fairest way to pay for the energy transition, including the shift to low-carbon heat

  • Legislate to extend Ofgem’s powers to regulate heat networks and establish an independent consumer advocate for heat networks in the forthcoming Energy White Paper

  • Consult on a strategy to decarbonise heat, which includes plans to improve energy efficiency of existing and new housing stock.

Gillian Guy, Chief Executive of Citizens Advice, said:

“The way we heat our homes needs to undergo a major transformation. How we manage that process, and fairly distribute the costs, needs the urgent attention of government.

“An independent commission is the only way to make sure the pathway to net zero is assessed in a rigorous, transparent and timely way.

“Consumers must be at the heart of the process, with the right protections built in for them now. The Energy White Paper is the perfect opportunity to fill the regulation gap for heat networks, and set the standard for future innovations.

“We need to get these decisions right now to prevent the bad practice of today becoming the standard practice of tomorrow.”