In Retail Energy – More meddling is needed!

The CEO’s of major British energy challengers have called for an end to ministerial meddling in the UK energy market. I am acutely aware of the downsides handing back my licence for Open4Energy out of disgust at the Labour ‘Price Freeze’ proposed by Ed Milliband, a Herculean effort in meddling of the worst kind. I also understand the desire for stability for the current energy market participants. However, as Chairman of the Energy Research Partnership committee looking at the utility of 2050 and as an innovator and financier in energy my current concerns are for the long term.

We need much more meddling. The retail energy design is the way meters, distribution companies, wholesale energy, bills, suppliers and customers all interact and it is a relic of a previous era in computing when folk talked about ‘main frames’. Now we need a retail energy design that looks like Alexa, requires the same training as Spotify and is run by tech-centred companies that embrace technology rather than ignore it. Customers would buy energy when they wanted, from whom they wanted, at any time in any amounts, pay for it in advance with a simple bill delivered at the point of sale, with a sprinkle of complete trust and totally open.  This can be done now (in fact, it could have been done years back), would be cheaper to run than the current system and no one would need to miss out, we would all be on pre-payment.

So why has this not been actioned? Well, it’s a combination of political uncertainty (no party is in power long enough to take a long term view) and regulators (by their own admission) always playing catch up. Moreover, neither of these two are renowned for being a hive of innovation, rather more for a culture of procrastination.

Such a redesign of the way we buy energy is an essential step as we tackle the increasing pressure on our society and the global community to decarbonise not only power but also heat and transport.  The utility of 2050 will need to have such a simple customer-centric system and the earlier we set about designing it the better but currently no one is doing this.

A cross-party, cross-industry group should be set up to start this work now, with a clear mandate to redesign using modern digital designs to meet customer objectives and not to put a patch on a broken and fatally flawed design from 1994 that has long outlasted its welcome.

David Casale

Former CEO and co-founder of Utilita (2003-2009), Fellow of the IMECHE, Associate of Poyry and Chairman of the Energy Research Partnership Steering Committee looking at the #UTILITY2050.

 

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