Industry raises concerns over DSR protections

Several industry bodies have raised concerns about a lack of protections for domestic demand side response (DSR) consumers.

Demanding attention: Managing risks today, to improve customer experience tomorrow is a joint report published by Energy UK, Citizens Advice and the Association For Decentralised Energy (ADE).

Included is a ‘risk register’ which lists 18 potential consumer risks with DSR services, where they are covered by existing legislation, what work is currently being undertaken to address these risks in the future and where there are likely to be protection gaps.

DSR services will become a defining feature of the shift to decarbonisation as technologies such as electric vehicles, heat pumps and smart domestic appliances become more common and used flexibly to help balance the grid.

One key area of concern for DSR services is the lack of access to redress. The report highlights that while there are licence obligations on suppliers and network operators, there is a lack of regulation of other players in the market.

Further issues raised include the potential for confusion to be caused by multiple parties interacting with one consumer.

For example if it becomes not only possible but common for multiple parties to offer services directly to the consumer, there is a risk of it no longer being clear who holds responsibility for consumer protections and who they should contact in case of issues.

It adds that there are unlikely to be protections to cover this particular risk and that the proposed P379 BSC modification from Elexon, which will enable consumers to buy and sell electric from multiple providers through meter splitting, will not cover the governance of multiple suppliers.

Speaking during a webinar as part of the report’s launch Dhara Vyas, head of future energy services at Citizens Advice, further explained: “General consumer protection is often not sufficient, it can prevent harm but it does not really promote fairness or good outcomes.

“For example it might stop a company from lying but it won’t really encourage them to check that people have really understood what an offer or a product can do for them or whether it’s appropriate.”

Also speaking on the webinar was Audrey Gallacher, deputy chief executive and director of policy at Energy UK, who said the high degree of scrutiny faced by the energy market made it all the more important to ensure new services and products are rolled out with minimal risk.

She said: “We already know that legislation and regulation haven’t caught up with where we are just now, never mind where we are going.

“In particular for consumer protection, arguably, it’s impossible to anticipate what we are going to need and we don’t know where the gaps are or what support customers are going to need. That is what has really driven us to do this.”

Meanwhile Caroline Bragg, head of policy at the ADE, said: “For households, flexibility offers the opportunity of great customer service and earning money from the energy system, not just paying towards it. For the system, domestic-level flexibility, with broader flexibility from business, offers the only way to reach net zero without breaking the bank.

“Domestic flexibility is still very nascent in the UK but it will, and indeed needs to, take off in the next few years. As the industry grows, it’s crucial that we continue to deliver consistently good customer outcomes.

“Today’s report, the fruit of collaboration between industry and consumer advocates, is a proactive step to making sure we continue to achieve this.”