I’ve been to two conferences this month where the role of the consumer was the last topic that we got to. Despite the collective brain power at these events, it’s still too hard to start designing a new energy system from the consumer. For many reasons it is far easier to start with the supply side and then ask the question what this means for the consumer.
But we know that unless we take the consumer with us, we go nowhere. I heard a nice phrase for this – the consumer has a veto.
What does the consumer want? And then how do we design an energy system that delivers it. My rationale is that there is an order:
1. Always on – security of supply. Consumers first concern is that the power is there when they need it. Governments will fall and there will be civil unrest if this is not met.
2. Affordable – the figure of up to 10% of income seems to be the acceptable level of expenditure on household electricity – about £2000 per year, with a further £1000 per household spent on petrol. Any more than this and governments get sweaty palms when they ask people to vote for them.
3. Invisible – people don’t like utilities digging up the road, they don’t like seeing pylons or turbines. A flyer for next week’s local elections landed through my door this week – the others want to build gas fired power stations in your back garden it reads.
4. Green Government – finally they expect their government to make the changes that will decarbonise the economy and make good on the commitments that the politicians made. Very few of us are prepared to decarbonise our own lives.
In designing a Consumer Centric Energy System, we must – firstly secure sufficient supply, lock this into as fixed affordable price as possible, agree where we can build it, and ensure that the central design delivers decarbonisation. Simple.
My contention is that this needs a fundamental change to how we charge for energy. Tariff reform is central to making this work. The fixed component of the charge is what secures the supply, and the variable determines the consumer behaviour.
And finally, we need to make electricity cheaper than gas.
