Consumer-centric energy policy could slash decarbonization costs, says report

A new report concludes that energy policy is too often not designed for the end user and the result “is a patchwork of overlapping, poorly coordinated and confusing policy choices”.

And it adds that if this were addressed and the customer put at the heart of policy, the cost of decarbonisation in the UK could be reduced by over à‚£8bn by 2030.

The study from the UK’s Association for Decentralised Energy (ADE) finds that customers face a complex jigsaw puzzle when trying to navigate energy policy.

“Energy policy was built in silos at a time when the system was centralized and with few players but this approach no longer works when thousands of businesses and millions of homes are vital to making a low carbon energy system a reality,” said ADE director Dr Tim Rotheray.

“Those who try and navigate the system and take energy-related decisions ” to invest in energy efficiency, to move to lower carbon heating or renewable power generation ” often find a complex puzzle of choices and no overall steer to guide their decision making.”

The ADE says that today’s transition towards a decentralized, flexible energy system is making the traditional, top-down, centralised system increasingly out of date. Whereas energy customers used to be passive drivers of the system, their active involvement is critical to the successful decarbonization of the energy system.

The report highlights how users are targeted with multiple policies which have the same aim, face inconsistent eligibility rules and an emphasis on outputs over outcomes.

The authors state that if these issues can be addressed, and policy successfully engages energy users, the cost of decarbonization could be reduced by over à‚£8bn by 2030.

To achieve this potential, the report recommends calls for the consumer to be put at the heart of the design of the new policy and regulatory framework, and also allowed to play a part in what has traditionally been delivered by a centralised system.

It says customers who provide a service to the system should be rewarded and also calls for all consumers to have access to good data on energy and be able to share this easily with service providers.

The ADE also policy should be “regulating for outcomes, not outputs” – innovation will continue to be crucial in a transitioning system, and must be encouraged”.

Dr Rotheray added: To deliver a system where energy users are able to participate in and benefit from the transition to a low carbon economy, there has to be a re-think about how policy and regulation are designed.

“The future system must meet users’ needs, be seen to be fair, and re-build user trust. This vision, where energy customers are at the heart of the energy system and its policy framework, is a vital part of delivering energy system decarbonisation.”

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