As the UK continues to work towards net zero by 2030, the National Energy System Operator’s (NESO) recent assessment underscores a critical challenge – achieving net zero is not just a technical undertaking, but a profound social transformation.

The NESO Clean Power report emphasises the need to “harness the value of flexibility for households, businesses, suppliers and aggregators”, highlighting the exact concerns the Centre for Sustainable Energy (CSE) has been investigating through the Smart and Fair research programme.

Meanwhile, in our detailed response to Ofgem’s Consumer Vulnerability Strategy refresh consultation, CSE has drawn on extensive research and experience supporting energy customers through our advice line, highlighting the barriers faced by consumers in an increasingly complex and sophisticated energy market.

We’ve long been pointing out that the transition to a flexible, smart energy system risks creating new forms of exclusion if not carefully managed.

Vulnerability is evolving – support needs to change

The energy market is becoming increasingly complex with a bewildering array of new smart energy products, services and tariffs. Our research has shown this has outpaced the ability of standard energy advice to keep up.

Consumers without smart meters, digital skills, or the ability to handle variable bills are at risk of being penalised or excluded from new market offerings.

To address this, CSE is calling for a coordinated national strategy to fund and provide in-depth smart energy advice across the UK. We also want to see government and industry work together to improve public understanding of the energy transition and the role of smart meters.

Our research, which includes insights from over 22,000 participants in flexibility service projects, has identified key areas of concern that align closely with both the NESO Clean Power plan and Ofgem’s vulnerability strategy.

Lack of coherent terminology and transparency

While smart energy innovations can provide valuable flexibility, CSE’s research has found that a lack of clear terminology and transparency is hindering consumer uptake.

The same terms are used to describe very different offers, and vice versa. This makes it confusing for people to compare options and confidently select the one that will work best for their needs and circumstances. For example, the term ‘flexibility services’ might be used to describe very different propositions such as an electric battery and time of use tariffs.

In addition to unclear language, there is also little information provided about the expected costs and benefits of these smart energy products and services. We’re calling for industry and government to collaborate with consumer groups to improve terminology and cost transparency.

Risks of a two-tiered energy market

Underpinning these issues is a broader concern about the potential for the energy transition to create a two-tiered market, where some consumers easily access cheap green energy while others are excluded or exposed to higher costs.

Smart energy products and services can help embed flexibility into the energy system but if not thought about carefully, they have the potential to create even more inequalities if the costs and benefits aren’t distributed fairly.

To address this, we’ve developed innovative tools like the Smart Energy Capabilities Lens. This framework helps analyse the diverse capabilities required for different smart energy offers, allowing us to identify and support those at risk of being left behind.

Coordinated action for a smart and fair transition

We are calling for coordinated action that includes:

• Developing robust methods to assess how costs and benefits of an expanded electricity system are distributed across consumer groups
• Requiring energy suppliers to proactively evaluate the inclusivity of their smart tariffs
• Mandating standardised information to help consumers compare energy products
• Improving monitoring of smart meter functionality, especially for vulnerable customers
• Investing in independent smart energy advice services

The path to a green, smart and fair energy transition demands more than technological innovation. It requires a fundamental reimagining of how we support consumers through this complex transformation.

Our goal is to ensure the energy transition works for everyone, not just those with the ‘right’ circumstances. By understanding the nuanced needs of different consumer groups, we can drive the development of more inclusive products, services and policies.