The UK’s transition to a smarter, more flexible energy system risks deepening existing inequalities unless government, regulators and industry take coordinated action, according to new research from the Centre for Sustainable Energy (CSE).
The latest findings from CSE’s seven-year Smart & Fair research programme conclude that access to the benefits of smart energy remains heavily influenced by household income, housing tenure and ownership of low-carbon technologies.
The report found households with solar panels and an electric vehicle can currently access 25 different smart energy offer types and save up to £523 a year on the most suitable tariff.
By comparison, a household renting with a gas boiler and a prepayment meter has access to just one offer type and potential savings of as little as £38.
Researchers warned that the gap is likely to widen as the smart energy market expands unless targeted interventions improve access to tariffs, advice and consumer protections.
Despite these concerns, the report highlights encouraging signs that flexibility services can appeal to a broader range of consumers. More than 2.5 million customers, most of whom do not own low-carbon technologies, have already participated in demand shifting schemes.
However, CSE found the increasing complexity of smart energy products risks excluding households that are less confident with technology or energy markets. It also warned that flexibility services may not be suitable for everyone, particularly households with very low energy use that have limited opportunities to reduce demand.
Chloe McLaren Webb, lead of CSE’s Smart & Fair research programme, said: “The transition to a smart, flexible energy system is one of the greatest opportunities we have to improve both the social and environmental impact of how we use energy. But seven years of evidence shows that fairness won’t emerge naturally, it has to be designed and delivered. We have the evidence, and a clear opportunity for coordinated action across markets, networks and policymakers.”
The report calls for government to monitor who benefits from smart energy, ensure grant-funded low-carbon installations include tailored tariff advice and follow-up support, develop a national communications strategy and require Ofgem to introduce new vulnerability indicators for flexibility services. It also urges distribution network operators to work with trusted local organisations to widen participation.
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