Empowering Energy Consumers:
Current and future challenges and options
CERRE Expert Workshop
9 March 2017
Empowering Energy Consumers:
Current and future challenges and options
Professor Catherine Waddams
Research Fellow, CERRE
University of East Anglia
Professor Claude Crampes
Research Fellow, CERRE
Toulouse School of Economics
The Consumer and the Retailer
Professor Catherine Waddams
Research Fellow, CERRE
University of East Anglia
Exand
postretail
evaluation
Consumers
energy markets
•
•
•
•
(Dis)engagement in the market
Role of potential gains
Vulnerable consumers in energy markets
Potential policies
Ex
post evaluation
(Dis)engagement
Competitive retail energy market based on consumers responding to lower
prices, pressure on companies to be more efficient and offer better deals, but
switching rates much lower than might expect for homogeneous product
• Does this challenge the model?
• Do (some) consumers need additional protection?
• Should consumers be encouraged to be more active?
• If so, which consumers, and how?
• What more information is needed?
Ex post
evaluation
Expected Gains
important
driver –enough?
In collective opt-in
auction, 2012,
switching rates rise
with savings offered
But level off at < 45%
Ex post
evaluation
Some consumer
groups
switch less (CMA)
•
•
•
•
•
•
•
older people: partly explained by lower expectations
on lower incomes
with lower educational qualifications
in rented accommodation
disabled people
on register as needing special help in case of interruption to supply
in Scotland or in rural areas
Are they vulnerable? Or are others? In need of special help?
Ex post
evaluation
Older
people
expect less
Expected gain, £s per month
18
16.19
16.15
16
14
13.29
From 2011
CCP survey
11.25
12
10
8
6.3
6.85
6
3.58
4
2
0
16-24
25-34
35-44
45-54
55-64
65-74
75+
Affordability:Ex
disparities
from CERRE research
post evaluation
Ex
post evaluation
Potential
policies
New technology: - Smart meters to inform about consumption, stimulate interest?
– price comparison web sites; new regulatory issues
– Agents who will switch, eg Flipper
• Who? - Almost active? Easiest to change
May decrease price responsiveness of both active and inactive groups
– Or least active - most expensive to shift (but some more in need?)
Different effects on market overall and who gains most (financially)
• Protection? Opt out collective switching? (Re)regulation?
Are the consumers at fault? or the model? What further information needed?
Demand response protocols
Professor Claude Crampes
Research Fellow, CERRE
Toulouse School of Economics
post evaluation
Clean EnergyEx
Package
(Explanatory memorandum, p.4)
• “In most Member States, consumers have little or no incentive to change
their consumption in response to changing prices in the markets, as realtime price signals are not passed on to final consumers.
• (…)
• More transparent real time price signals will stimulate consumer
participation, either individually or through aggregation, and make the
electricity system more flexible, facilitating the integration of electricity
from renewable energy sources.”
Ex post
evaluation
Physical flows
and
commercial flows
Transmission
and
Distribution
Production
Wholesale
market
Consumption
Supply
Retail
market
Ex
post evaluation
A troubled
world
Hourly price (GBP/MWh)
Monday February 27 - Saturday March 4
N2EX DAY-AHEAD
120
100
80
60
40
20
1
5
9
13
17
21
25
29
33
37
41
45
49
53
57
61
65
69
73
77
81
85
89
93
97
101
105
109
113
117
121
125
129
133
137
141
0
Ex post evaluation
Heterogeneous
consumers
number of
consumers
quantity
consumed
ability
profitability
+
-
+
+
-
Ex post
evaluation
Degrees
of responsiveness
• Full participation in wholesale vs. ad hoc programmes
• Large variety of demand-response programmes
– encourage consumers to reduce energy use during system peak periods in
exchange for lower electricity bills and/or premiums
– contingent or planned prices and/or quantities.
• Currently fashionable: sales of ‘non-consumption’
– baseline: non-consumption as compared to what?
– price: who pays what to whom?
Ex post
evaluation
Degrees
of responsiveness
evaluation
AggregatorsEx
of post
electricity
load curtailment
• Costs:
– fixed network costs
– measurement and connection costs increasing with the number of subscribers
• Revenues increasing with the total volume under control
• Then a portfolio with a small number of large consumers is much more
profitable than with a large number of small consumers.
• Aggregators of load curtailment by households are lobbying for subsidies.
ExRelated
post evaluation
topics
•
•
•
•
•
Prosumers
Energy storage
Energy efficiency
Flexibility
…