This summer, Ofgem released a call for input on what is needed to engage domestic consumers in energy flexibility – a critical part of the future energy system. Read a summary of Regen's response and recommendations below.
This summer, Ofgem released a call for input on what is needed to engage domestic consumers in energy flexibility – a critical part of the future energy system. Read a summary of Regen's response and recommendations below.
Domestic Demand Side Response (DSR) is an important element of future energy systems. Our past work estimates that 20-30 GW of domestic DSR will be needed by 2035, rising to over 40 GW by 2050.
Not only is this flexibility necessary to support the roll out of heat pumps and EVs, but delivering flexibility on the demand side, rather than centrally, can deliver whole system cost savings of up to £2.5bn every year.
However, DSR requires customers to move from passive billpayers to active participants in the energy system. The way in which DSR offerings are structured, and the way in which customers are engaged, is therefore critical to the successful uptake of demand side flexibility and to unlocking its benefits.
This summer, Ofgem released a call for input on what is needed to engage domestic consumers in energy flexibility.
Conduct early, participatory, and thoughtful engagement with consumers. This includes listening to what people care about, communicating using clear and simple language, and tailoring engagement approaches for different groups.
Design products to support diverse motivations. These may vary by customer archetype as well as the features of the DSR offering. Financial benefit is important, but other factors that align with people's wider values and norms may be more powerful. This could include being a good citizen, acting in line with their peers, supporting their community, or helping address societal or environmental issues.
Address barriers to participation. These include issues such as (1) a lack of trust in the energy industry and DSR technologies, (2) a lack of interoperability between platforms and providers, (3) insufficient value propositions, (4) missing hardware, and (5) perceptions of unfair DSR solutions.
Support consumers across their different DSR journeys. Past research on smart home adoption has shown that different support is required across different elements of the customer journey.
Empower local and community actors. These actors have a key role to play as the interface between the energy sector and consumers. They are widely recognised as being more trusted than energy suppliers. They also know their communities better, including how to engage with different – and sometimes hard to reach – segments.
Embed fairness in DSR design. While not everyone may want to or be able to participate, it is important that those people who will be impacted by the changes that DSR brings have the opportunity to voice concerns. Additionally, some people may be structurally excluded from fully participating, and should not be penalised for this.
Government, Ofgem, DNOs and local stakeholders all have important roles to play, and must work together to ensure alignment of priorities throughout any process of reform.
Government should:
Ofgem should:
DNOs should:
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