Strategy and Policy Statement for energy policy in Great Britain: consultation response
In our response to the government Department for Energy Security and Net Zero consultation on the Strategy and Policy Statement for energy policy in Great Britain, the Centre for Sustainable Energy outlines that the current statement fails to adequately define the most important strategic priorities and policy outcomes for government.
A fair and inclusive approach is lacking
A ‘fair and inclusive’ approach to defining and shaping our future energy system is lacking. Ensuring that there is a fair transition is a central priority and theme which should be front and foremost in the statement that’s being consulted upon.
It’s clear from past consumer research and the UK Climate Assembly that public consent for, and
participation in, the transition to a smarter system is dependent on that transition being obviously
‘fair and inclusive’.
‘Smart’ without ‘fair’ is neither socially acceptable nor politically sustainable. But it is also true that ‘fair’ without ‘smart’ won’t deliver net zero.
This has been fundamental to CSE’s Smart and Fair research programme which has led to us working with and engaging many of the network operators. For example, we led the market engagement research for the HOMEflex project to bring consumer concerns into the development of a Code of Conduct for Flexibility Service providers.
Our future system will need to include things like:
- Lower rates or rewards (through time-of-use pricing or flexibility service provision) for
adjusting electricity demand to avoid peaks or to match the output of renewable generation (and higher rates or penalties for failing to do so).
- Flexing electricity use in time through smart, demand shifting equipment or ‘behind the
meter’ electricity generation and storage.
- Becoming involved in local or peer-to-peer energy supply.
All of these need people to engage with the energy system in a way that they’ve never done before. To do so they need to have trust in the system, and you can’t build trust without fairness.
The priorities as they stand talk about effectiveness and cost efficiency, yet fairness seems to be missing. Over the last few years, we’ve seen a further decline in consumer trust in the energy market. Consumer trust is a fundamental building block of our future energy system.
But you can’t build trust if the system isn’t fair
By focusing on system efficiency, it seems that the statement has forgotten about fairness and the
need to reduce energy demand overall.
Wealthier households are able to consume as much energy as they want, while lower income households who use less energy contribute to the system costs created through high consumption. The Future System Operator (FSO) should work creatively with other agencies and bodies beyond the energy sector to consider how to achieve a fair transition (such as the health sector and local planning authorities) and take into account the broader societal value an energy system should deliver.
For example, an energy system that supports active transport as well as the uptake of electric vehicles, or considering ‘sufficiency’ as well as ‘efficiency’.
Fuel poverty seriously missing
The statement also gives no regard to fuel poverty and the distributional impacts of energy policy.
Ensuring that no one is left behind and that the system is designed to minimise fuel poverty are both
fundamental building blocks of a fair future energy system.
Indeed, given the current context for energy supply and the cost-of-living crisis, it’s astounding that the words “fuel poverty” appear nowhere in the Strategy and Policy Statement. And it’s shocking that the Government’s own Fuel Poverty Strategy, Sustainable Warmth: Protecting Vulnerable Households in England (2021), is actually omitted from the introductory context and strategic priorities (page 3).
We would expect more ambition and imagination in finding integrated solutions to eradicating fuel
poverty alongside delivering system efficiency and net zero. e.g. In the same way that government is
proposing support for the industry to deliver area-based technology trials, focused effort could be
made to deliver ‘no fuel poverty‘ neighbourhoods or towns.
In our full response, we’ve made direct edits to the strategic priorities outlined in the consultation.