Publication - Publication

Energy consumer action plan

Published: 15 May 2019

Sets out our commitment to ensure consumers are at the heart of Scotland's energy transition.

17 page PDF

3.0 MB

17 page PDF

3.0 MB

Contents
Energy consumer action plan
Our Framework

17 page PDF

3.0 MB

Our Framework

This document sets out a vision, building blocks and actions to guide the Scottish Government’s own energy policy development and influence change in the UK-wide market over the next two years until the end of this Parliament. This framework will underpin our efforts to improve outcomes for Scotland’s energy consumers. 

Vision

Transform the way consumer issues are understood and tackled in Scotland to deliver a transparent and inclusive market that serves all domestic energy consumers, including the most vulnerable, fairly – now and in the future

Building Blocks

Aim

Listen and Act 

Listen to – and in collaboration with others – act upon what consumers tell us about their priorities, needs and interests to ensure long term interests of consumers on price, quality, safety, reliability, and security of supply are a fundamental part of the energy system

Engage and Empower

Give consumers accessible tools and advice to unlock the benefits of the current and future energy system as individuals and as a society

Protect

Embed timely – and ongoing – consideration of consumer impacts into reserved and devolved energy policy and decision-making

Innovate

Develop and trial new solutions – big and small – to persistent and emerging problems. Capture and share learning turning pockets of innovations into industry wide improvements

Outcome

Fair and inclusive policy design and implementation which reflects consumers interests and needs

Active, confident and energy-efficient consumers

A consumer-centred transparent market that promotes consumer fairness and trust

Good practice becomes common practice

This action plan is part of a long term commitment to transform the way consumer issues are understood and tackled in Scotland. We will see these actions through for this parliamentary term, but we also commit to evaluate progress and identify new actions for the next action plan. 

Listen and Act 

Listen to – and in collaboration with others – act upon what consumers tell us about their priorities, needs and interests to ensure long term interests of consumers on price, quality, safety, reliability and security of supply are a fundamental part of the energy system.

We commit to continuing to work alongside consumer groups, Ofgem, industry bodies and the UK Government to meaningfully involve consumers and citizens in energy policy development and implementation. Recognising the need for a more transparent dialogue with consumers, this building block aims to drive fair and inclusive policy design and implementation which reflects the interests and needs of Scotland’s consumers.

Engage and Empower

Give consumers accessible tools and advice to unlock the benefits of the current and future energy system as individuals and as a society.

As part of our approach to embed a consistent approach to understanding the interests of, and impacts on consumers in public policy making, we commit to making it is easier for people to be active and confident energy consumers. In doing so, we must recognise the diversity of consumers across Scotland both in policy development and in the way we target tools and advice. We will use our newly developed consumer segmentation model to understand different consumer groups – including those that are harder-to-reach – according to their needs. We will start by finding out what people want and need.

Protect

Embed timely – and ongoing – consideration of consumer impacts into reserved and devolved energy policy and decision-making.

As we embed a consistent approach to consumers in public policy making, we will ensure that all stakeholders – including those working across government, regulators and industry – strive for a transparent, consumer-centred energy market that promotes fairness and trust. This means taking steps where necessary to protect consumers in vulnerable situations so they are not left behind.

Innovate

Develop and trial new solutions – big and small – to persistent and emerging problems. Capture and share learning, turning pockets of innovations into industry wide improvements.

Innovation is a priority within Scotland’s Economic Strategy and the Scottish Government is committed to creating a safe space to trial new ideas in all sectors, including energy. We commit to sharing good practice and lessons to encourage them to become common practice across the energy market.

“I never perfected an invention that I did not think about in terms of the service it might give others … I find out what the world needs, then I proceed to invent” 

Thomas Edison

Actions

We will establish an independent Energy Consumers Commission for Scotland to give Scottish consumers a more powerful voice in Scottish and British energy policy. 

In 2016, the Scottish Parliament was devolved powers for consumer advocacy for the energy sector amongst others. This means that we have power to shape how the consumer voice is represented to regulators, policy makers and industry. We will use these powers to bring the Scottish consumer voice into the increasingly technical and complex energy market by establishing a commission which is independent of government. 

To understand the issues and to influence decisions, organisations will require technical regulatory and engineering knowledge of how the electricity and gas systems are designed, operated and funded. We are therefore looking closely at how to fund and deliver support and advice for consumers, communities and local authorities on issues such as networks charging, retail market price caps, smart meters and data privacy. 

The Commission will also co-ordinate advocacy across bodies representing consumers, including citizen and community groups, front-line advisers, ombudsmen and grassroots organisations. It will strengthen the collective influence of these organisations. It will also provide a much stronger consumer voice to the Scottish Energy Advisory Board.

We will learn from innovative models in Scotland such as the Customer Forum for Water, as well as from further afield, including Energy Consumers Australia. We will begin establishing the Commission now with the aim of Consumer Scotland playing a role going forward. 

We will bring together industry, consumer groups and Ofgem to develop an energy consumer charter for Scotland, which will set guiding principles to support the collective effort needed to address the issues that impact Scottish consumers.

Delivering a carbon neutral Scotland demands collaborative action: no single organisation can create and implement the solutions we need to deliver a fair and inclusive energy transition. 

At present, there is no way of bringing together Scotland’s energy supply and network companies and representatives with Ofgem and consumer groups in order to tackle the most pressing questions around whole-system energy issues such as: what do consumers want and need from the energy system – and what motivates them; how does digitalisation affect consumer engagement; and how can we ensure vulnerable consumers benefit from new technology.

That’s why, building on the Scottish Energy Summits held in 2016 and 2018, the Scottish Government will lead efforts to develop a public-facing energy consumer charter for Scotland. The charter will set the guiding principles needed to collectively understand and address the issues that affect and matter to Scottish consumers. This will include tackling persistent issues such as the challenge of accessing the benefits of smart meters. 

Through the charter, Scottish consumers will be able to trust that the market understands what they need – and crucially, consumers will be able to hold the market to account. Sharing good practice and innovation will form new collaborations and solutions for the benefit of all consumers. Once established, the Energy Consumers Commission for Scotland will take the lead on implementing and monitoring the charter.

We will consult widely to encourage lively public debate that allows the people of Scotland to shape their energy future.

The growing complexity of the energy system is a challenge for everyone and there is a real risk this could lead to poor outcomes for consumers, particularly those who are vulnerable. All organisations involved in how the system is developing need to work harder to make the implications of this change clear and accessible to everyone. This includes traditional stakeholders such as suppliers, network companies and the regulator, but also new players such as energy aggregators. 

We will consult widely to encourage lively public debate that allows the people of Scotland to shape their energy future, building on the foundations laid through the development of Scotland’s Energy Strategy. We will work with consumer groups and grassroots organisations to engage with people across Scotland in a variety of ways, including through focus groups as well as social media and online. Our engagement will help us to understand what concerns people, as well as where they see opportunities to do things differently. 

The evidence and insights we gain during this consultation will be used to improve and tailor the support and advice the Scottish Government and partners provide to consumers on issues ranging from energy efficiency to electric vehicles- and in particular, to improve support for vulnerable consumers. We will also use insights to shape our policy and interventions. 

We will take forward our engagement alongside similar initiatives by the Scottish Government’s Just Transition Commission and Climate Change policy teams, and will share insights from our engagement widely.

We will legislate to introduce a statutory consumer duty on Scottish public authorities to place consumer interests at the heart of policy and regulatory decision-making, ensuring that consumer outcomes are reflected in the energy transition.

To deliver on Scotland’s Energy Strategy and the goals therein, in a way that treats consumers fairly, we must understand and address consumer impacts and encourage positive behaviour change. The forthcoming Consumer Scotland Bill will introduce a statutory duty on public authorities, including the Scottish Government, to consider consumer impacts when taking strategic decisions and developing policy. The duty will ensure that:

  • policy and regulatory decision-makers examine their policies at an early stage to determine potential impacts on consumers; 
  • there is increased meaningful consultation with consumers and consumer groups during policy development; and 
  • the impacts of policies are reviewed after implementation to reduce the risk that consumers are being unreasonably or unintentionally impacted.

The duty will help us to identify opportunities and challenges for consumers. For example, we are committed to phasing out the need for new petrol and diesel cars and vans by 2032. To do so, we recognise that we will need to tackle barriers to the widespread adoption of electric vehicles by consumers. For example, we are expanding Scotland’s electric charging infrastructure between now and 2022, helping to make ‘range anxiety’ a thing of the past for Scotland’s consumers. 

We will continue to advocate to the UK Government and Ofgem on much needed reforms to the energy market. In parallel we will work to improve consumer outcomes where we have the powers.

The Scottish Government will continue to call on the UK Government and Ofgem to deliver the market reforms that we think are needed for Scotland’s energy consumers. This includes enhancing support for renewable energy uptake by consumers as well as promoting increased engagement through the rollout of advanced smart meters so that all consumers can benefit, regardless of geography or circumstance. 

Scotland’s powers in consumer advice and advocacy also signal that it is time for a change in how we work with Ofgem. We will call for greater accountability regarding the critical decisions Ofgem makes that affect Scottish consumers, and we will continue to work constructively with the regulator to ensure that Scottish consumers receive full consideration. 

We will invest in supporting new approaches to tackle energy affordability through our new Improving Consumer Outcomes Fund, to ensure that the energy market works for all consumers, including the most vulnerable.

We have previously committed to launching the Improving Consumer Outcomes Fund to test creative and innovative solutions to long-standing and detrimental consumer issues. Solving energy consumer problems will be a key focus for the Fund. We will draw on expertise from across the sector to identify consumer issues which would benefit most from targeted intervention. However, our initial ideas include:

  • Building on the Scottish Government’s ShareLab Scotland programme and research in Australia, how the principles of the sharing economy and future energy flexibility can be used to allow citizens to share or donate energy to those most in need.
  • Creating a collective switch to help Scottish consumers save money on their energy bills, particularly those on low-incomes or living in rural and island communities. We will learn from the success of Ofgem’s recent collective switching trials which resulted in more than one in five customers switching through a simplified process, saving customers on average around £300 a year.
  • Exploring the viability of oil buying clubs for our most remote, rural communities in the Highlands and Islands and the South of Scotland to help people save money on their heating bills. This follows research by Citizens Advice Scotland which revealed the challenges faced by citizens who use oil to heat their homes.

We will explore ways to provide more holistic support to vulnerable energy consumers, including making it easier to access priority support and providing more help for consumers with energy debt.

Any one of us can, through a change in circumstances, become vulnerable at any time. When we find ourselves in a vulnerable situation, we depend on water and energy more than ever. Consumers are entitled to free extra help from energy and water companies through priority registers. We know that awareness of these registers is not as high as it should be in Scotland, with the proportion of consumers on registers substantially lower here than in other parts of Great Britain. 

We commit to build on the findings of research by Citizens Advice Scotland and to work with Scottish utilities companies, the Citizens Advice Service, Ofgem and Scottish Water to explore ways to raise awareness of the support available. We will look at whether existing innovation funds can be used to find ways to make signing up simpler. 

Additionally, much more needs to be done to help those in financial difficulty. Ofgem’s latest figures show that while 2.2 per cent of Scottish electricity consumers and 2.5 per cent of gas consumers are in debt, many more have no arrangement to repay their debt. We also know that consumers with debts of more than £600 can, and often do, find it much harder to get back to financial stability. 

Many organisations, including StepChange, Citizens Advice Scotland and the Extra Help Unit, already offer invaluable support to those with energy debt. We want to understand if our new devolved responsibility for debt advice offers scope to increase support for consumers with energy debt. We commit to bring together stakeholders to understand what works at the moment and how we can build on this to offer more holistic support. 

We will develop an interactive data hub to provide the most comprehensive picture possible of the experience of Scottish energy consumers.

To effectively target policies and monitor our impact, we need to be able to access and use data that provides a comprehensive picture of the reality for Scottish energy consumers. Currently, there are gaps in understanding which consumers switch suppliers and tariffs and their motivations for doing so, and knowing where off-grid gas consumers are located. 

As committed to at the 2018 Scottish Energy Summit, we will continue to work alongside Ofgem to make best use of data for the benefit of consumers. Wherever possible we will include regional data. This will be especially useful to build an understanding of consumers’ experiences across Scotland, particularly in the Highlands and Islands and South of Scotland. Establishing an interactive data hub will help us to represent the needs of consumers more effectively than ever before.

I never worry about action, but only about inaction.

Winston Churchill


Contact

Email: ConsumerandCompetition@gov.scot