Don’t settle for second best: Ensuring energy market reforms stack up for people

Don’t settle for second best: Ensuring energy market reforms stack up for people 1.24 MB

As the move to a net zero power system gathers pace, households and businesses will be able to cut costs by using energy at times when renewable generation is abundant and cheap. This flexible energy usage will also save money by reducing the amount spent on expensive generation and grid reinforcements to meet peaks in demand, and help integrate new technologies like electric vehicles and batteries.

To achieve this, billions of pounds have been invested into market reforms and infrastructure like smart metering that can help unlock domestic flexibility. Marketwide Half Hourly Settlement (MHHS) is one such reform, and will incentivise suppliers to develop smart products and services for their customers. But we’re worried that the benefits of these reforms won’t be maximised without action to make them work better for people.

Risks that some consumers on default tariffs may face unfair price rises need to be tackled. Insufficient targeted bill support means that low income consumers could be at extra risk. A sluggish smart meter rollout means a significant number of households across the country can’t use smart energy products if they wanted to. And more needs to be done to increase innovation alongside appropriate protections that mean a wide range of consumers are confident to engage - not just the most affluent households.

The next two years will be critical to ensure everything is in place for people across the country to benefit from a net zero electricity system. This paper lays out a set of measures to ensure that happens.