Consumer-led flexibility: Proposals seeking views on the best approach to consumer engagement

Yes, we agree that the UK Government should be exploring how to achieve a more joined up and holistic approach to consumer engagement on consumer-led flexibility (CLF). We echo the consultation’s concern that without this, there’s a risk of increasing complexity, incoherence or confusion for consumers and lack of participation from some groups, such as those on low incomes, those who are digitally excluded or are vulnerable, such as those relying on a constant supply of electricity for medical equipment.

To reach the UK Government’s 2030 clean power target, consumers are set to play a significant role – according to NESO, 10-12 GW of CLF will be needed by 2030, which is around four times current levels. Without consumer buy-in to flexibility, the transition to a smart, decarbonised power system will therefore be difficult Consumer engagement is a well known barrier, so overcoming this by clearly communicating the value of CLF and enabling informed consumer choices of different CLF offerings will be key.

We agree that all of these functions should feature in a consumer engagement framework, as each will be key to realising the potential of CLF. As an independent and impartial

As consumers are expected to be key participants in providing flexibility, for them to be engaged, they will need greater clarity, information and guidance to help them understand their role and realise the benefits that are available to them from participating. Awareness of flexibility remains low, with recent research by the MCS Foundation finding that 78% of survey respondents said they had never heard of it, and only 4% reporting knowing exactly what it is. This underlines the importance of a Communications function within any consumer engagement framework, to raise awareness of flexibility and how it will benefit households. This is explored further in our response to Question 9.

Once consumers are engaged and aware of the importance of flexibility, as they will have to interact with the energy system in new ways, a strong Advice function will be essential to support them with this journey.  Impartial, tailored advice which offers a simple and seamless consumer journey will be key to help households make informed decisions about participating in flexibility and choose the right products or services that suit their needs or preferences. This is explored further in our response to Question 8.

In terms of the sequencing of the two functions, it is our view that the Communications function should come before the Advice function. This is because households must first be informed and educated on flexibility before they would then benefit from advice to help them take action on the information they’re received.

We do not propose any additional or alternative functions.

Our response to this consultation focuses on the Advice and Communications functions, both of which we believe require a high degree of intervention to deliver the level of consumer engagement needed for the necessary levels of flexibility to achieve Clean Power by 2030.

Our response to this consultation focuses on the Advice and Communications functions but we do not believe that either of these can be comprehensively provided via current in England. Whilst national advice services are already in place in Scotland and Wales, there is a distinct gap in the provision of impartial, tailored advice in England. Whilst there are pockets of local advice and support for households in parts of England, overall existing provision is patchy and variable. This means the current consumer journey for many households in England is complex and confusing and ultimately insufficient to drive the necessary pace and scale of retrofit, which is key to enabling flexibility.

In the devolved nations, advice provided under existing programmes such as Home Energy Scotland and Nest in Wales could potentially be expanded to include more in depth CLF related advice.

As the UK Government is responsible for flexibility in GB, it is important that consumers across all nations have access to consistent high quality advice. A coordinated approach supported by adequate funding and oversight will be key to ensuring that all GB consumers are able to participate in flexibility regardless of where they live, so that no one is left behind.

We have not provided responses related to the industry-facing functions of the framework.

We have not provided responses related to the industry-facing functions of the framework.

We support the consultation’s recognition that the Advice function should focus on being trusted, neutral source of information. As CLF is still a relatively new market, people are likely to be unsure where to start or where to go for trusted information and support. Access to clear, impartial advice will be essential to help consumers understand their options and feel confident engaging with flexibility. It is also key that the advice provided is impartial in nature so that it is trusted by consumers and effective in driving engagement with CLF so they don’t think they are being sold something – research by the Social Market Foundation underlines this, with a quarter of respondents stating that ‘not having an agenda/trying to sell something’ was the most important factor when seeking advice (in relation to low carbon technologies).

However, whilst we are encouraged to see recognition of the need to provide advice to engage consumers in CLF and would recommend the high degree intervention is adopted, we would suggest a more joined-up approach to advice through a national advice service in England where advice provision is lacking, as explained in our response to Question 5. This would ensure that people have access to trusted, neutral advice on flexibility as well as on what steps they can take to upgrade their home. This is especially important given that meaningful participation in CLF depends on households having low carbon technologies in their homes.

From our work delivering Scotland’s national advice service, Home Energy Scotland, on behalf of the Scottish Government, we can see the positive impact of free, impartial and tailored advice in accelerating the installation of low carbon technologies, which is the first important step to enabling participation in flexibility. Home Energy Scotland is available to all householders (owner occupiers, tenants) and smaller private landlords, and each year the network helps more than 130,000 customers in Scotland. The advice is delivered online, by phone and in person, helping to overcome the behavioural and financial barriers to the installation of energy efficiency improvements and low carbon technologies.

After receiving advice from a HES adviser, 42% of customers had installed at least one energy efficiency, low carbon heat or renewable energy improvement and 42% of customers were planning to install at least one improvement in the next 12 months.

Of the measures installed, among the top five that were attributed to HES advice in 2022/3 were air source heat pumps, solar PV and floor insulation, all of which will play a role in enabling flexibility. Home Energy Scotland advisors also support households to understand how to request a smart meter, how to use it to change their behaviour as well as helping them to ensure that the tariff they’re on is the most efficient and effective for their needs.

Given that low carbon technologies enable consumers to benefit from CLF and participation in CLF allows consumers to make the most of LCTs, advice provision must be made simple to ensure consumers don’t have to seek advice from separate places. Seeking advice from separate places would further complicate the consumer journey and put households off engaging. This is also reflected in the current Call for Evidence on the smart meter installation journey which highlights the importance of integrating the consumer journey, including use of smart meter data to support LCT installations and unlocking the benefits of smart tariffs.

We think that any Advice function should provide tailored advice and support to individual consumers via an advice service. This is closely aligned to the high degree of intervention outlined in the consultation but, as explained above, advice on CLF and on home upgrades must be integrated through one service to ensure a streamlined consumer journey.

As stated in the high degree of intervention approach, in order to provide advice to individual consumers, it is important that support is offered via multiple channels. Our delivery experience in Scotland tells us that impartial, tailored advice delivered via phone, online and in person is a strong driver of action, as it helps to overcome the behavioural barriers to the installation of energy efficiency improvements and low carbon technologies, which are key enablers of flexibility.

From our experience delivering advice services, we know the importance of partnering with trusted intermediaries, such as charities and health care organisations, and are pleased to see this recognised in the consultation. Building referral pathways particularly helps to reach the most vulnerable or hard to reach through existing customer support networks, to ensure they receive the right support for them – whether that’s about home upgrades or flexibility.

As recognised in the high degree of intervention approach, advice should support consumers to get further support or redress if they experience problems so they can be resolved quickly. We also think an advice service should provide post-installation support to help individual households with operating and maintaining newly installed low carbon technologies, helping to guarantee that carbon emission and energy bill savings are realised and ensure they’re on the best tariff for their particular circumstances. It is particularly important that advice is accessible to households as the energy landscape becomes increasingly more complex, to avoid them making the wrong tariff choices or adopting suboptimal actions that are costly and further undermine trust.

International lessons to learn

When looking at the international advice landscape a key feature of successful schemes is offering all households tailored and impartial advice. For example, France’s large-scale, wrap-around retrofit scheme was set up in 2022 (building on existing initiatives) and offers comprehensive support and financial assistance programme for homeowners. In 2022 alone, 670,000 renovated homes were delivered, including the installation of 156,000 heat pumps. The service also offers joined up support for owner occupiers to act on a range of energy saving measures with online tools, assessments, retrofit management support and lists of accredited installers. France’s advice service has considered the customer journey and sought to make this simple wherever possible. The provision of personalised expert advice ensures that households have the confidence to install the right measures for them and can be confident in the benefit these will deliver, which will be key to maximise engagement in DSR.

It is our view that there should be an overarching campaign on the net zero transition which presents a positive vision of the transition and the role the public can play. This high level narrative should then link to the different layers of the transition such as the benefits of using energy flexibly.

We are pleased to see the consultation recognise the importance of any communications on CLF being compatible with the UK Government’s net zero public participation strategy, due to be published in 2025, and wider government campaigns, including the campaign currently being developed by DESNZ to the UK Government’s Clean Power Mission. It should also be well-integrated with any related messaging on smart meters so that households understand the role of smart meters in enabling them to benefit from CLF and other measures and technologies installed in their homes. In a landscape involving multiple actors, joined up and consistent communication will be essential, to ensure households are not left confused or misinformed, especially if it’s about a concept like CLF which many are not familiar with.

It’s also important that any communication campaign tells people where to go or what to do next to act on the information they’ve received from the campaign, such as signposting to advice services for personalised advice on what they can do to upgrade their home and participate in CLF. This is why it will be important that the Communications and Advice functions work alongside each other as part of the framework.

It is our view that the framework should focus on both national and targeted communications. As explained above, it is important that any communications on CLF are part of a wider national campaign on net zero so that households understand the complete picture and what role they play.

More targeted communications will also be important, recognising that different consumer types will have different motivations, interests and needs. There will be highly engaged consumers who always invest in the latest technologies, less engaged consumers who want problems solved for them, and those who aren’t able to engage and will need a different level of support. This will especially be the case for consumers in vulnerable situations who may be less able to engage with the market. It will therefore be crucial to have a detailed understanding of consumer needs, so that appropriate narratives can be developed for different consumer types. Consumer segmentation will therefore be key in order to communicate clear and specific end user behaviours that they can act on based on their individual circumstances, and participation should be monitored to understand any emerging inequalities.

International lessons to learn

There are also lessons to be learned from other countries in relation to communication campaigns. In response to the energy price crisis, most European countries – particularly through the winter of 2022 – launched government communications to inform citizens about the energy saving actions they could take, framed as an urgent national priority.

The French experience running a national energy demand reduction programme has been particularly effective. Sobriété Énergétique (which translates as “energy sufficiency”) has mobilised society around a national energy saving target, allowing the public to see how they can benefit from bills reduction, while also helping deliver energy security and decarbonisation.

The campaign also made French energy consumption accessible to the public on a weekly basis, enabling everyone to see progress. Such a target provides a framework for both short and long-term communications about behaviour change. In the immediate energy crisis context, Sobriété Énergétique has promoted short term actions that are very similar to those in the UK’s bill saving focused campaigns. But these are framed within and alongside messages about longer term steps and actions (such as renovation) to achieve longer term reductions in energy demand. There is an opportunity for the UK Government to use the 2030 clean power target at the centre of a wide public behaviour change, communicating ways of reducing demand, including engaging in flexibility, with progress towards the target monitored and reported on.

The Irish ‘Reduce Your Use’ information campaign is also of interest, particularly because of the careful design of the messaging. The campaign was delivered at a challenging time for government communications due to negative sentiments about energy costs, therefore one of the key considerations was that it needed to convey empathy at a time when many people had financial worries. The campaign was careful to raise awareness about ways of reducing energy, but only where it was safe for people to do so. This is a difficult balance to strike, but the campaign was successful in communicating what help was on offer and alleviating worry. Messaging was tested before being released widely and was tracked, so that it could be adjusted according to the public sentiment at the time.

Though quantitative impact data is limited, the Irish Government are using the programme learnings to gather insight on how best to measure impact from these initiatives. Such an approach is important when designing communication campaigns to ensure the framing lands well with consumers and encourages them to act of the information presented to them.

As part of our work advocating for a national expert advice service for England to be part of the Warm Homes Plan to support people to upgrade their homes, we have developed indicative costings for such a service.

The overall cost would depend on several factors, including the number of households the UK Government would want a service like this to help each year, as well as how it is structured, the measures it prioritises and the degree and depth of specialist advice it provides. Based on our experience of delivering comparable services, we estimate that such a service would cost in the low tens of millions per year, but the exact cost would be highly dependent on its scope and configuration.

This would be comparatively low cost compared to the £13.2 billion already allocated to the Warm Homes Plan. It would also provide significant return on investment – based on our delivery experience, every £1 spent on providing expert, tailored advice returns almost £15 in lifetime savings for the households we advise through Home Energy Scotland.

Although these figures relate to a broader advice service (rather than one solely focussed on CLF), they demonstrate the potential cost effectiveness of investing in trusted, impartial advice infrastructure – which could include CLF specific advice.

No response.

Yes we agree.

It is our view that the UK Government should be very involved at the start whilst the consumer engagement framework is set up, moving to somewhat to ensure the engagement framework is enabling the necessary levels of flexibility needed for clean power by 2030.

No. It is our view that the framework should be established earlier than the end of 2028, given that the UK Government expects CLF to go from 2GW (2023) to 10-12GW by 2030, which is a significant jump. The earlier the framework is established, the more likely it is for this to be achieved.

No response.

Low income and vulnerable consumers

There is an important group of consumers who have flexible assets in their homes who are on low incomes or are otherwise vulnerable. This includes, for example, people with electric storage heaters, and people who have LCTs such as heat pumps and batteries installed by social housing landlords or through a government scheme (eg ECO, SHDF or Warmer Homes Scotland).

It is important to ensure these households are able to participate in flexibility by making sure that consumers who have these assets in their homes are on the most appropriate tariffs for them to act flexibly if they want to and that are signposted to information and impartial advice and support. Without targeted engagement and support, there is a risk that some of these consumers – despite having the necessary technologies in their homes – will be unable to access the benefits of flexibility.

Small and medium enterprises (SMEs)

It is also important to recognise the critical role the 4.79 million SMEs in England will play in helping the UK meets it clean power target. However, SMEs also experience barriers to engage and participate in flexibility and will therefore also need access to impartial, tailored advice and support to help them get that right for them.

Lessons can be learned from our experience delivering Business Energy Scotland which provides free, impartial support and access to funding to help SMEs improve energy efficiency and decarbonise heating in their premises, which is the first important step to enabling participation in flexibility.

The importance of smart meters

The smart meter roll-out remains an important constraining factor for CLF participation and increasing adoption of second-generation smart meters would ease this constraint. Broadening and aligning campaigns around smart meters, CLF and raising awareness that smart meters enable new products and services, could help support SMETS2 roll-out and data sharing, as well as introducing consumers to CLF.

People without functioning smart meters will need an alternative route to be able to participate fully or partially in flexibility. The smart meter communications network currently only has 95% coverage, so for consumers not covered by the network, or for people who don’t have smart meters for any other reason apart from choice, there needs to be some pragmatic alternative routes to participate partially or fully. These issues disproportionately affect people in rural households.