By Daniel Hunter
Addressing an audience of UK and European business and political energy leaders, Rhian Kelly, CBI Director for Business Environment policy, argued for greater cooperation between the energy industry, regulator and government to help consumers make more informed choices in a market where bills are on the rise.
On the challenge of rising energy costs, Rhian Kelly, said: “The easy way out is to get into some kind of blame game, with government pointing the finger at industry for price increases and vice versa.
“But this doesn’t move the debate on and I think it is time that industry and government had a more honest conversation about solutions to make the market work better for consumers.
“Energy bills are going up. Neither side should try and hide the facts. But we should be clear on the reasons why. It's because global prices are increasing. It's because we need to invest to keep the lights on. And it's because policy costs are rising to facilitate investment in a balanced energy mix, which we need to make sure our bills don’t rocket.”
On clearer price information for consumers: “There's no shortage of information out there. But we need to make sure people have the right information to make informed choices about how they use gas and electricity. And if we're honest, the complexity of tariffs makes it pretty difficult to do that, even if you know your usage patterns.
“Energy companies have made efforts on this front, but the industry as a whole ought to come to a view on what a good solution looks like. We need to find a balance between choice and simplicity.”
On helping new entrants to the energy market grow: “There are more new entrants into the retail market than ever before, with independents holding around 550,000 accounts and around 2% of market share. This is good news for consumers but we need to ensure these companies can continue to grow.
“The policy cost exemption for companies with fewer than 250,000 customers has worked well for encouraging new entrants, but could come to act as an artificial barrier to growth when companies start hitting that threshold.”
On the role of new technology in managing bills: “There is plenty of scope to put the customer in control. Smart meters will give real time visibility to how much power is being consumed, and by which appliance. Mobile phone technology offers even more potential, for example making it possible for me to turn the central heating on through an app on my way home from work.”
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