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Broadband-like charging structures could deliver fairer energy transition, SSEN says

Image: Getty.

Image: Getty.

Scottish & Southern Electricity Networks (SSEN) has published a new report aiming to investigate the potential for broadband subscription-esque pricing models for the power sector.

The network operator’s Core Capacity report, published alongside CAG Consultants, has sought to investigate fairer ways to charge energy customers as the way consumers interact with electricity changes, looking particularly at how smart meters, electric vehicles and electric heating could change the way customers interact with electricity.

SSEN said it was driven to commission the study to ensure all customers are treated and billed fairly as low carbon technologies come on stream, with the DNO having pointed towards its commitment to ensuring any energy transition is equitable for all households.

It added that this could be achieved through the implementation of new charging structures that “look more like the way you pay for your broadband connection” than traditional, pay-per-consumption billing methods.

Working with CAG, SSEN used learnings from its five-year, Solent Achieving Value from Efficiency (SAVE) project, funded by the Low Carbon Networks Fund, which pulled together 4,000 homes to trial energy efficiency technologies and determine how they could be used to manage peak and overall demand.

That trial generated data which, combined with 15-minute settlement data, household-matched surveys and time-use diaries, CAG said was “extremely powerful” in creating insights into peak requirements.

One of the principal findings from CAG’s research was that new and emerging business models for supply charging stood to “break the link” between consumption volume and cost, indicating that subscription-based or ‘energy as a service’ models could be more equitable ways of charging consumers in the future.

It also found that electric vehicle charging was having no impact on household peak demand, and that evening peaks remain a feature of households despite changes in working patterns, driven predominantly by consumption from cooking and evening entertainment.

These findings could contribute towards greater understanding of which activities customers could put off to save on bills, and which are insensitive to pricing signals.

Nigel Bessant, head of network trading at SSEN, said that there was a need to understand how to support customers moving more of their energy away from peak times to help keep costs down.

“Our research published today examines which activities are time sensitive, such as cooking the evening meal, compared to doing the hoovering, which customers may be happy to defer. Our goal is to ensure that people’s need for core capacity in their energy services are met equitably,” he said.

Subscription-based billing methods have emerged as being of significant interest to energy suppliers as they look to decouple themselves from ever-decreasing margins, perhaps best evidenced by the number of UK based energy retailers who’ve bemoaned competitive pressures of late.

When its merger with npower was still on the cards, SSE’s supply division said it was looking at bringing out a “completely new model” of supply business, while the likes of Orsted and Good Energy have either launched or intend to launch energy as a service models.

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