‘We need to be careful about what we ask consumers to engage in’

Decarbonisation will require mass behavioural change among consumers, but how best to do this? A Utility Week roundtable, in association with Capgemini and Energy UK and part of our Countdown to COP series, brought together senior leaders to discuss the issue with the UK’s net zero business champion Andrew Griffith.

The government should shift its focus from “old-fashioned” notions of consumer engagement on the net-zero transition and instead pursue a policy of “environmental by default”, according to an energy sector leader.

Utility Week’s roundtable, “Activating the Potential of Individuals in Climate Combat” held in association with Capgemini and Energy UK, focused on the best ways to communciate the message that everyone has a role in combatting climate change.

It brought together senior figures from across the gas, electricity and water sectors with some contrasting views on how to ensure “public buy-in” and whether that is actually necessary.

The point was made early on in the debate, and unanimously supported, that despite all of the progress in decarbonising the power sector, the next stage of the net-zero journey will be far more complicated and new approaches are needed.

However, there was less consensus on the best approach to take the transition into people’s homes.

One energy network CEO pointed to a recent study that found only 15 per cent of the public believe they have a role in stopping climate change. They went on to say that the utilities sector has an important part to play in empowering customers to see that their individual actions can make a difference.

Other industry leaders warned that the vast majority of the public are never going to meaningfully engage in the finer points of decarbonisation.

One CEO said: “Just look at smart meters. That was the world’s worst thing to get a customer to pick and choose. Why did we think people would want a choice on that?

“We need to be careful about what we ask consumers to engage in.

“If you go to the doctor and find out you’ve got a serious illness, you don’t want to hear, ‘I can give you five choices’. You want to be presented with a solution to the problem.”

They cited the decarbonisation of heat as an example of an area where it would be especially difficult to inspire the public.

“It’s not like electric vehicles [EVs] – people love cars. There’s a kudos to it.

“Heat is much more difficult but there is a natural cycle of replacing boilers. I can’t imagine people getting excited about it but people have to do it.

“There are a small group of people out there who will get excited by decarbonisation of heat but the majority won’t. We have to get away from the old-fashioned idea of consumer engagement. Make it easy for them. Make it the default. Make it so, why wouldn’t you pick that.”

They stressed that the “catalyst” for this could be new-build homes.

“Create the rules and then you will get the innovation, which will drive the costs down.”

Another senior figure in an energy retailer agreed with this approach, urging the government to “mandate and make decisions”.

They said: “With gas boilers – just say it. Give the command to the regulator – no ¬retrotfit of gas boilers after 2030 and that will develop the heat pump market. Then you can talk about subsidies and creating green jobs.

“The fastest way to get things done is to assume that customers won’t change, set the default in the way you want it and educate the customers so they don’t go against it.

“It’s really about environmental by default, so the customer doesn’t have to choose but they can if they want.”

However, another CEO said pointedly that: “We’re not China. We don’t dictate. People want to feel they have a role in stopping climate change.

“I agree that we have got to make it really easy for the consumer and we certainly have to drive down costs. But, for me, the lesson from the smart meter programme isn’t that we shouldn’t bother to engage with the public but that we should do a better job of it.”

A water company CEO said that in their own smart meter programme, they had taken on board a lot of the “painful lessons” from the energy sector.

“A lot of that was about being clear about what we, as the utility company, want to get out of smart meters as well as the customer.

“It’s showing us a lot of really valuable stuff about behaviour and we’re able to reflect that back in a way that helps customers save water and save money. It’s a simple and a powerful message.”

A fellow water sector boss said there were lessons to learn from the pandemic on how to communicate the need for behaviour change.

“In late February last year we were all in denial – going on about our days with no real change, despite some pretty scary signs that this thing was serious. A month later, we were adapting to a completely different way of life. That was a month. We’re two years on from the climate emergency being announced but I’m not sure it’s drilled deep into people’s consciousness that we really are facing an emergency, and that it needs a demand-side as well as a supply-side response.”

They added that in engagement with customers, the inter-generational impact of climate change had been one successful way of prompting action.

“When you present to customers that if we don’t act now, the cost falls on the next generation, that is a real penny-dropping moment. In that context people see how important it is that they play their part now or they are just leaving the problems to their children and grandchildren.”

Utilities ‘should be the vanguard’ of net zero

The UK’s net zero business champion has urged utilities to see the UN’s climate conference in Glasgow this November as a “marshalling moment in time”.

Andrew Griffith MP, the former Sky executive who entered the Commons in the 2019 intake, was appointed to the newly created role in November. He told the roundtable that the private sector, and utilities in particular, would ultimately provide many of the answers to climate change conundrums and said the government recognised this.

He said: “Utilities should be a vanguard of what enterprise and capital can deliver. Many of you are already leading this journey and I want you to know that is recognised.

“Our shared endeavour is how do we harness the ferocious problem-solving power of business for all of the wider challenges we have in society, including the climate crisis?”

He said this was particularly true of engagement with consumers on changing behaviour – a process described during the debate as “re-plumbing every aspect of human behaviour”. He pointed to utilities’ close relationships with consumers across the country as a key enabler of behaviour change.

Reacting to the points raised in the discussion, Griffith promised to feed back to government, adding: “Pace is what I have heard and that seems to be a common goal.”

He added: “COP26 is a marshalling moment in time. It gives us a sense of momentum to engage in these discussions with a time pressure, which I think is really useful. We can all of us use that to keep our feet to the fire.”

Pro-business message hasn’t filtered down to civil servants

Government is listening to the utilities sector but civil servants often remain a blocker to progress, participants insisted.

Opening the debate, Griffith stressed there was a real willingness to listen from this government, highlighting the level of access to secretaries of state.

The industry representatives at the roundtable agreed that at a senior level, government is open to dialogue.

However, one added: “I don’t know if the message that the government is willing to listen has necessarily filtered down to the civil servants. We haven’t been given the same open-door policy from the civil servants as we have from ministers.

“What we get are requests to plot everything out on the page. We just don’t have time for that and it’s not always clear how this all joins up.”

They added: “It’s great that access to government has improved but that really needs to turn into action pretty soon. My worry is that we’re waiting on a whole load of strategy documents and I really hope they contain a proper roadmap as opposed to more consultations.”

A suggestion from one policy expert to ease the logjam of policy was to speed up the consultation process. They suggested a blanket 30-day period for all consultations.

In response, one participant said: “In theory that would help to drive things forward but it very much depends on the period before the consultation.

“If we’ve been kept in the loop about what is developing and how it all fits together then four weeks is fine. At the moment it feels like a lot of work is done in the ivory towers and then it’s presented to the people. Too often there are complete surprises in there. That doesn’t seem to work for anyone.”

‘We’re scared of telling regulators what to do’

Energy firms will struggle to build trust with consumers when theya re constantly talked down by their own regulator, according to one senior figure at a retailer.

The debate touched on what was perceived as a mismatch between the message coming from government on net zero and the approach taken by Ofgem.

The retailer said: “Look at the projections from Project Discovery back in 2010 when Ofgem was predicting duel fuel bills up by 150 per cent worst case and 16 per cent best case by 2020. In actual fact, by 2018, it had dropped by £200.

“We cannot have our regulator torpedoing its own industry and then expect to build trust on the journey we need to go through with the population.”

Another CEO said: “We seem to be scared as a country of telling regulators what to do. We’ve got this complete political and mental block about interfering in independent regulation.

“That’s a complete nonsense. I don’t think there’s anything wrong with the government stating very clearly to the regulators – by 2030 here’s how many charge points we want across the UK. By 2030, here’s what we need done to the distribution system to allow that to happen. It’s then up to the regulator to work independently within that framework.”

A policy expert added: “Clearly sectoral regulators and their interplay with competition policy is important. Sometimes that interplay between government and regulation is underpinned by a somewhat short-term desire to align paybacks with political timeframes. We should properly expose that. I welcome that debate.”