The current crisis in the UK energy retail market could bring many opportunities for the sector, a leading energy consultant said.
Jon Slowe, Director of the energy consultancy Delta-EE spoke to ELN about the lessons the industry can take from the current turbulent times: “Silver linings, a difficult word to use in some ways when companies are going bust when people are struggling to heat their homes. But every crisis never let a good crisis go to waste.”
Mr Slowe said he could identify three lessons from the existing landscape: “First of all, I think our current retail market structure is not fit for purpose. It is not fit for low carbon, high-efficiency future.
“Secondly, I think there is a real lesson in how the energy sector has engaged and does engage with customers and the relationship between customers and energy sector. And thirdly, the need for demand management and flexibility.”
His view is that the current market structures in the energy sector are not doing one of these three points. Mr Slowe added the current market structure is wholly focused on commodity and not on delivering the outcome to customers.
Asked about the reasons the market experiences so many energy suppliers collapses. he said that is the result of how the market operates: “I think the collapses are more functional of the price cap which is political and the way the price caps work and the inability to pass on the high costs. But I think it presents the opportunity to fundamentally rethink what we are trying to achieve in a competitive energy market.
“I don’t think we should only try to achieve the lowest commodity customers, I think we should be trying to achieve the lowest bill for the customer. And that bill is a function of not only the commodity cost but how much commodity people are using. So, if you incentivise to structure a market focused more on the bill and not on the commodity costs, then you see a lot more innovation in helping customers to use energy more efficiently, cut our emissions and our energy consumption.”