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Bridging the gap to net zero: how consumer archetypes shape the energy landscape

CSE Project Officer, Elliott, shares why we need to understand consumer capabilities to design a greener, smarter and fairer energy system that will support our transition to net zero.

The benefits, cost and impact of our future energy system must be shared across society
fairly. Otherwise, people will not buy into the transformation that’s needed. The choices people make about the appliances they use, the technologies they invest in, their opinions on new technologies, and the energy services they use, all affect the energy system and the rate we can decarbonise.

At the Centre for Sustainable Energy (CSE) we’ve developed profiles to represent energy consumers and enable better policy design and decision-making. We call these consumer archetypes. These archetypes have recently helped two giants in the energy industry – Ofgem and National Grid ESO – understand the differences in consumers’ smart energy capabilities and how these differences affect how quickly our energy system will change as well as who will see the benefit and who will shoulder the cost.

Developing the consumer archetypes

CSE’s archetypes were developed by considering the different factors that affect a consumer’s ability to play an active role in the transition. Things like the type of house they live in, their income, or their confidence in using new technologies for example. Our profiles are based on these factors and allow us to understand who will find it easy to engage and who may find it harder.

Using the archetypes helps design energy policies and promote energy technologies and smart energy systems in a more thoughtful and nuanced approach.

The archetypes can be used to:

Moving into a smarter energy system needs a detailed representation of consumers

The move to large-scale low-carbon energy is complex and requires lots of behavioural changes from consumers. Not only does the energy grid need to be able to handle demand, but people need to be both on-board with the change AND able to make those changes.

There are lots of barriers to sustainable energy for individual people. Opinion is one and the practicalities of adopting these new energy technologies and behaviours need to be considered too. For example, renters have different options open to them than homeowners, and those who lack digital confidence may find themselves struggling to adapt or getting excluded from beneficial technologies like smart meters, even if their homes could support them.

Both Ofgem and National Grid ESO have different questions they need to answer about consumers with their archetypes. Ofgem needs to understand consumer vulnerability and how consumers can be better served through national policies. National Grid ESO needs to understand consumer attitudes and the ability to adopt low-carbon solutions.

Understanding consumers’ smart energy capabilities is key to analysing new energy policies and future energy plans. By better representing consumers, the energy industry can improve its predictions about how people will respond to change and what they need to feel empowered by it.

Ofgem consumer archetypes

CSE, commissioned by Ofgem, segmented the population of Great Britain into a set of distinct groups of energy consumers. Together, these reflect all households across the country.

We developed 24 archetypes derived from the Living Costs and Food (LCF) Survey, supplemented with the Ofgem Consumer Engagement Survey and the English Housing Survey. The archetypes created are used to model the distributional impacts of energy policy.

The archetypes represent a wide range of households. For example, one profile reflects the lowest-income households with a gross annual income of £14,523. This group is mostly made up of single adult retirees, over 75 years of age and where the majority don’t have an internet connection.

On the other hand, another profile represents the highest earning group. Households are made up of families with one or more children where their parents are in full-time employment, aged between 35 and 54. Most own their own detached or semi-detached homes, with 97% of homes in a rural setting.

As you can imagine, both profiles will have very different needs and capabilities when it comes to how they use energy. And both groups – as well as the remaining 22 archetypes – need to be considered in planning of the future energy system.

Understanding vulnerable consumers

We previously developed a set of archetypes for Ofgem in 2019. In 2023, we added more profiles to reflect the changing vulnerabilities of consumers. For example, we included disability types and eligibility for government schemes, such as Winter Fuel Payments, Warm Home Discount Scheme, Energy Company Obligation and Cold Weather Payments.

How Ofgem uses the consumer archetypes

Ofgem used these archetypes in its Distributional Impacts Model. This model assesses various policies (including the price cap changes that have rocked consumers for the last few years) through their impact on the different archetypes. The aim is to protect current and future consumers by assessing the costs and benefits of using energy and participating in a smart energy system for different households in the UK.

This allows Ofgem to identify which type of consumers are impacted most by policy changes, and importantly, how policies can be targeted to benefit vulnerable consumers.

National Grid ESO archetypes

For National Grid ESO, we provided a set of domestic energy consumer archetypes that will be used in their Future Energy Scenarios (FES) modelling. Using these archetypes, FES aims to accurately predict energy use across the country as we transition to a smarter energy system.

The 18 archetypes were created using the Smart Energy Research Laboratory (SERL) dataset. The SERL data is really useful as it contains smart meter data for over 10,000 British households at half-hour resolution. This makes it an incredible resource for determining detailed energy use patterns. And this data is linked to survey responses that describe people’s views on the energy market.

The 18 archetypes were produced by splitting the SERL dataset by the following characteristics:

These variables have the largest impact that determines daily energy usage patterns, allowing National Grid to have a greater understanding of the way different households consume energy.

Using consumer data for meaningful change

ESO’s archetypes are used to investigate people’s current electricity and gas demand, for example how energy is used throughout the day as well as people’s capacity for flexibility, their attitudes towards low-carbon technologies and their capability to take these on.

The archetypes were mapped at the Local Super Output Area (LSOA) level, a very fine resolution that allows ESO a more detailed understanding of exactly when and where demand is going to be high. In turn, this means that the FES model can predict:

These predictions will give ESO a greater understanding of domestic energy consumption across Great Britain. From this, their knowledge can be used to inform schemes such as the Demand Flexibility Service, so that it more accurately benefits the consumer as well as the energy system.

Making our energy system smart and fair

For decades, CSE has been working to make energy fair and accessible to all. Our Smart and Fair programme equips decision-makers with data and recommendations to create a greener, smarter, and more equitable energy system. Plus, we’re all about open data, shared standards, and transparent communication, making sure everyone can be part of the change. With this foundation, our consumer archetypes put the consumer first, representing their behaviours, needs, and capabilities to drive more consumer-centric energy initiatives.

These two projects strongly align with two key pieces of CSE’s strategic principles. One is that the energy market should be smart, which is addressed by the National Grid ESO archetypes. And secondly, that the energy market should be fair. This is reflected in Ofgem’s archetypes.

The archetypes are being used by key actors in the energy sector and will be updated as new information becomes available. CSE makes sure consumers are put at the heart of the decision-making process so that no one is left behind.

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