In July the Competition and Markets Authority (CMA) published the provisional findings of its year-long investigation into the energy market.
The headline of the findings was that the CMA provisionally found that competition in the wholesale gas and electricity generation markets works well and that the presence of vertically-integrated firms does not have a detrimental impact on competition.
However, the CMA also found that “millions” of customers are paying too much for their energy bills, primarily because we aren’t engaged with energy as we are in every other part of our lives and therefore don’t shop around for better deals.
The CMA’s suggested response to the problem focuses less on regulatory intervention. It makes the point that regulatory interventions designed to simplify prices, such as the ‘four-tariff rule’, have not had the desired effect of increasing engagement.
Instead, the report looks at ways in which energy customers can become more active.
In the words of Roger Witcomb, who chaired the energy market investigation, smart meters have the potential to transform customer understanding and engagement. His comments on Radio 4 are available here.
Our own independently-commissioned research proves that smart meters will transform customer engagement with energy – something that’s always been hidden away under the stairs, our meters ticking away in kilowatt hours and therms, a language we don’t understand.
Smart Energy Outlook, published this weekend, shows that people with smart meters feel more informed and in control of their energy use. More than four in five (82%) feel they have a better idea of what they are spending on energy. Nearly as many (79%) people with smart meters believe that their bills are accurate, compared with just over a half of those with traditional meters. And 70% of respondents with smart meters said that they feel more conscious about the energy they use at home.
What’s more, more than eight in ten smart meter users (84%) would recommend one to others.
These findings underline the benefits of digitising Britain’s last analogue industry.
Smart meters will bring an end to the absurdity of estimated billing, and allow customers to take control of their energy use.
In future, smart meters will be the great enabler of rapid switching. As we move further through the national rollout, 24-hour switching will finally become a reality.
Those with a smart meter will be able to move across to another supplier with minimal fuss and with uninterrupted and accurate billing.
And, really importantly, smart meters will have particular benefits for prepayment customers, who currently pay more than other customers for an inconvenient service. With a smart meter, anyone will be able to choose pay-as-you-go and top up online, by phone or at a shop without needing to have a clunky key meter installed and pay higher prices.
Between now and 2020, every household and small business in Great Britain will be offered a smart meter by their energy supplier at no extra cost.
This major and essential technology upgrade is unprecedented in its scale.
Equally challenging is our task to help everyone in Great Britain understand how smart meters can get their gas and electricity under control.
To achieve this, we’ll need to earn support across Government and all political parties, the media and, in a connected world, energy customers.
As our research shows, the early signs are encouraging, but we now need to spread the word to make sure that everyone in England, Scotland and Wales has the chance to get their smart meter and reap the full benefits.
Smart Energy GB fringe event in association with New Statesman
Beyond the price freeze: where next for Labour and energy policy?
Tuesday 29th September 2015, 12.30 – 1.30pm
Tennyson Room, Thistle Hotel, Kings Road, Brighton, BN1 2GS (outside secure zone)
With Dr Alan Whitehead MP, Shadow Minister for Energy and Climate Change, Audrey Gallacher from Citizens Advice, Gary Smith from GMB, Lawrence Slade from Energy UK, Sacha Deshmukh from Smart Energy GB
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