The energy sectors being held back by outdated policy obsessions that have dominated and distorted policy making and regulation for too long, says a new report by Challenging Ideas and Imperial College Business School.
The group wants to sweep away easy cliches in the sector that drive policies in the wrong direction. For example, it says ‘security of supply’ is not about power generation but local infrastructure and cybersecurity; consumers will buy energy in new ways, such as bundled with other services, and should be protected by one-stop consumer regulations instead of an energy regulator; licences for energy suppliers should be abandoned; and moving to low carbon sources is not a ‘trilemma’ but an opportunity.
Report co-author Laura Sandys said discussions about the energy industry had to start from a different place: “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”.
She added, “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.”
“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 bi-directional, 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.