Westminster Advisers was delighted to welcome Angus MacNeil MP, the chair of the House of Commons Energy and Climate Change Committee, for a recent roundtable discussion on future challenges in the energy sector. Taking place in the context of a fast changing energy policy landscape the roundtable was an opportunity to discuss the government’s priorities for energy policy over the last year, and the Energy and Climate Change Committee’s approach to scrutinising it.
While ministers have emphasised the role of the consumer in energy policy over the last 12 months, the discussion highlighted there remains question marks over what a consumer-centric energy policy looks like in practice and how this will be implemented.
It was clear that the previous political consensus on the ‘energy trilemma’, and the development of energy policy that reflected a consideration of cost, carbon and security of supply is all but broken. The view of those in the room was that while previously generation projects needed to be positioned as addressing all three factors – or as many as ideally possible – cost for consumers is now king.
At least in part this reflects the perception that HM Treasury is playing an increasingly significant role in the development of energy policy with cost being their over-riding concern. While reducing costs for consumers is a cross-government priority, there is a danger that this strategy could lead to a short-termist approach that discourages investment. Anecdotal evidence suggests it is increasingly difficult to convince government of the value of investment into new technologies which could lead to short term increases in consumer bills despite leading to cost savings in the future.
Moving on to supply and retail, it was clear that to establish an effective consumer focused energy policy, there needs to be a focus on increasing consumer engagement. As one participant noted, many consumers currently feel uncomfortable engaging with the energy market and aren’t making purchasing decisions as informed consumers. Despite the work of the Competition and Markets Authority, it may be that to create an energy policy based around consumers the focus needs to be on making customers more engaged with the market.
While inevitably more questions than answers were provided, it’s clear that those from across the energy industry are looking for greater clarity as to what an energy policy focussed on consumers looks like, and what long term implications it will have for energy generation as well as supply.