Consumer Protection and Empowerment for a Clean, Affordable, and Faster Energy Transition

May 10, 2023

Consumer centricity in clean energy system is vital to tackle climate change and affordable, secure energy access goals in conjunction. This is now more important than ever, as consumers around the world face unprecedented price pressures generated by fossil fuel dependence and triggered by the turmoil of the war in Ukraine. Today’s twin challenge is to help consumers through present difficulties whilst enabling a rapid transition that secures inclusion, sustainability and affordability in the shortest timeframe possible. The costs of inaction are and will be more and more severe, both to people and planet. The opportunity to leverage currently available tools to meet both goals at the same time is well within our reach.

Currently, the various policies and regulations that frame the energy market, and the offers for consumers in this market, lag behind in meeting this twin challenge, partly because they have not been designed from the point of view of the energy user, although we have seen quick and effective reactions in some countries both on public and private realms to shield customers from turmoil.

The White Paper “Consumer protection and empowerment for a clean energy future”, developed by Consumers International and Enel Foundation, is a first step in changing this. It discusses the barriers that consumers face to changing the way they use energy towards more sustainable models and examines how improved consumer protection and empowerment can help to overcome these barriers and achieve a faster energy transition.

The paper’s key takeaways are:

1. Key aspects and enablers of the energy transition – such as electrification, efficiency, digitalisation, and decentralisation – all depend on consumer action. There is no realistic pathway to electrifying end-uses that does not mobilise individual consumer investment at scale. Nor is there a plausible worldwide vision of a decentralised clean energy system that does not include solutions such as self-generation and energy communities.

2. Consumer engagement in the energy transition brings personal and systemic benefits for all: the energy system become more effective, efficient and resilient, and consumers benefit from lower energy bills, improved home comfort and value, better health and improved air quality. For example, a consumer-centric energy transition could deliver saving ranging between 40% and 60% thanks to shift to electricity for heating and cooling (heat pumps) and cooking, local embedded electricity production and fixed price renewable energy supply versus fossil fuel based energy with variable prices that depend on the oscillation of commodity markets.

3. Consumer protection and empowerment can address many of the barriers that exist for consumers to take action on their energy supply, on the choices they make when purchasing and using appliances, and on how much they engage with the energy system.

4. Taking a consumer journey approach to assess the barriers to a faster and fairer energy transition uncovers multiple intervention opportunities at each stage:

·        improve consumer awareness and understanding of the need and opportunities for change;

·        improve the market availability of suitable, safe, and affordable options;

·        remove barriers to implementation at the point of investment;

·        ensure efficient, safe, and effective use of new products and services;

·        ensure consumers’ needs for maintenance, repair and redress are met.

5. In addition to these actions, there is an overarching need for the viewpoint and needs of consumers, and their protection and empowerment, to be embedded in the design, regulation and operation of the energy system.  This will require action and co-operation between energy market actors, energy system designers, regulators, and policymakers, and consumer representative and protection organisations. It is essential that the consumer experience is fully represented and considered in the energy transition.

The White Paper recommends:

·        Harmonizing energy and consumer policymaking and regulation at the national and international levels.

·        Supporting market offers and business models that protect and empower consumers by design, such as through the creation of one-stop shops to provide consumers with comprehensive, trusted information and advice.

·        Ensuring greater measurement and tracking of progress on the consumer-side of energy transitions, with the inclusion of metrics on affordable access to energy solutions, savings passed on to customers, understanding of clean energy solutions and their benefits, and access to clean transport solutions.

The report can be downloaded here.