Energy Consumers Network
Meeting Six
Date: Friday January 31st
Time: 10.00 – 12.45
Location: Consumer Scotland offices, Edinburgh, and online
Attendees:
Chair - Lewis Shand Smith
Age Scotland - Adam Stachura/Lyndsay Clelland
Changeworks - Laura Webb
Citizens Advice Scotland - Matthew Lee
Consumer Scotland - Sam Ghibaldan, Kate Morrison, Christopher Jones
and Alastair Wilcox (for RTS only)
Energy Saving Trust - Beth Mukushi
Energy Action Scotland - Frazer Scott
Local Energy Scotland - Chris Morris
Trust Alliance Group/Energy Ombudsman - Craig Wilson
Ofgem (Observer) - Adam Cochrane-Williams
Secretariat, Consumer Scotland - Andrew Faulk
Apologies:
Advice Direct Scotland - Pamela Stewart
Individual Member - Dan van der Horst
SFHA - Cassandra Dove
The Wise Group - Amanda Currie
Welcome and introductions
1. The Chair welcomed members to the meeting.
Notes of last meeting
2. The notes were agreed without changes.
Chair’s update
3. There has been one SEAB meeting since the last ECN, focused on the UK Government’s ambitions around renewable electricity generation and associated grid upgrades. In future, consumer energy prices will be more closely linked to the costs of capital necessary to fund renewable electricity and associated infrastructure, rather than the costs of ongoing (and volatile) fuel prices needed for gas fired generation. The UK Government is seeking to widen the narrative from a transition to Net Zero to one of clean, cheaper power.
4. The discussion on different aspects of community energy (below) is closely related to this. Both the UK and Scottish Governments recognise the need for ongoing engagement with communities affected by new infrastructure developments.
5. Expanding on this, the forthcoming SEAB meeting will concentrate on issues around Strategic Planning, and REMA (the UK Government’s Review of Electricity Market Arrangements).
Member updates
6. All members noted that a high volume of consultations was underway at the time of the meeting, on issues ranging from energy debt, to heat network regulation and the future remit of Ofgem.
7. Energy Action Scotland reported feedback from their members:
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- The cost of living crisis is continuing for many people; as discussed previously by the ECN and its predecessor SEIC report, energy debt is an increasing issue.
- Issues raised in advance of the EAS online spring conference are now less about general standards and more about specific issues, such as RTS.
- Concern around pace of action at both UK and Scottish Government levels; for example around underspends in Scottish Government area-based Energy Efficiency programmes.
- Changeworks echoed this and added that timescales for delivery of these programmes – and others – are constrained by in-year funding arrangements. Budgets are often not confirmed until the summer, leading to bottlenecks in delivery for those businesses or public sector organisations unwilling or unable to work at risk. EST agreed to consider this issue following the meeting.
8. Age Scotland
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- As shown in the recently published Scottish House Condition Survey, which presents 2023 data, fuel poverty figures rose in that year compared to 2022; 37% of older households are estimated by the Scottish Government to be in fuel poverty, and about half of all those in extreme FP are older households.
- Changes to the Winter Heating Payment are unhelpful in this context, especially given the cliff edge for support. Age Scotland estimate that 350,000 pensioners are on very low incomes, below the income tax threshold but above the eligibility threshold for pension credit. Single pensioner households and those with disabilities will be hit harder.
- Also, issues around digital exclusion with some suppliers advising customers that Warm Home Discount applications can only be made online.
- Calls to Age Scotland’s helpline suggest there is greater awareness of support schemes. Positive outcomes associated with those assisted include a 40% increase in client financial gain, to £2,600 on average for successful applicants.
- However, both Age Scotland and other members recognise that data matching would offer a more structured solution to provision of assistance than individual help.
9. The Chair noted that data sharing appears to work more easily in other countries, and also that smart meter data can highlight to energy suppliers those who are under-consuming energy. Energy Ombudsman
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- The extension of service to small businesses has gone live and now covers businesses with up to 50 FTE employees, so 90%+ of all GB businesses.
- The Ombudsman had, with other members, participated in a Scottish Government roundtable in relation to metering in social housing. Suppliers are both failing promptly and reliably to reset meters in void properties; and to install meters in new build properties. Both are concerns in the context of the current housing emergency.
- Noted that an issue in the latter case is that there has not been a customer for complaints to be attached to. Small business extension partly helpful in this in that many housing associations are small businesses, but members noted that no standard exists on a timeline for companies to deliver these services.
- Members also noted a number of instances of disconnect between the commitments expressed by energy supplier core policy staff and practice encountered by consumers (include ECN staff) of advisers and subcontracted meter installers.
10. CAS
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- Energy debt is an increasing issue through CABs, and energy is now, at 17%, the biggest single source of enquiries across the network. Access to fuel vouchers and WHD are the most common areas.
- Average energy debt £2,500, rural areas £3,100, so getting worse: more likely to be unemployed / health issues / low SIMD areas / social housing/in-work indebtedness / single parents.
- RTS percolating through across Scotland, hard to get meter installers in Orkney / Western Isles, CAS to send out call for evidence from advisers to get more information on this.
11. Changeworks
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- Continuing to provide advice to consumers; demand is following the typical annual pattern now, with additional work on trying to engage with excluded groups.
- In addition to funding issues with programme delivery above, including the hiatus in Home Energy Scotland (HES) funding from the Scottish Government, it is also harder to leverage in ECO funding due to complexity of programme management.
- Also seeing inconsistency in relation to bids for Energy Redress Scheme funding.
- Impacts of this are that organisations like Changeworks are increasingly working at risk and spending more time on funding applications, which detracts from helping consumers.
- There has also been a ban on marketing spend for HES.
- There is uncertainty around what will happen from April 2026, when both the Warm Home Discount and Energy Company Obligation are due to expire. There is also uncertainty around the regulatory framework for Heat in Buildings.
- Members appreciated that aspects of UK Government approaches, for example on gas boiler replacement, make a Scottish approach more difficult. However, this uncertainty further emphasises the importance of Scottish demand-led energy efficiency and LCT programmes in the interim.
- The Chair noted that this uncertainty was also reflected in the work of the Green Heat Finance Task Force.
12. Consumer Scotland
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- Investigation into consumer protection frameworks around energy efficiency and low carbon heating will be published imminently; had been intended to link to HiBs but delays above have influenced timing.
- Framework discussion paper published on energy affordability.
- The final report on disabled consumers and energy assistance, discussed at the September 2024 meeting of the ECN, has also been published.
- Participating in a data working group with UK Government / DESNZ, highlighting the benefit if the remit could be expanded to include both other sectors and links between different government departments and nations.
- Commissioned Regen to undertake rapid evidence review on the future of the retail market, focusing on 4 areas: (i) tariffs and services for the future; (ii) data and digitisation; (iii) consumer protection; and (iv) inclusive energy market design.
- Heat Networks team have been working at pace in advance of the consumer protection function going live at the start of April
- Signed a strategic partnership with NESO to share consumer and network expertise. Including two NESO policy advisers joining CS on short-term secondment to work on network policy.
Ofgem Update
13. Ofgem have a number of current and imminent consultations at present, and took the opportunity to thank members and others for continuing input. Current work includes:
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- Consultations on Improving debt management standards in energy markets and on the case for an energy debt relief scheme. Workshops have taken place on consultations, attended by some ECN members.
- Consultation on the 2025-2026 workplan – this is largely an evolution from last year, with the main change being the incorporation of the UK Government’s Clean Power 2030 aims.
14. Future consultations will cover:
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- Proposals for tariffs with no standing charges, expected imminently.
- Continuing work on outcomes for consumers.
- Updating licence conditions for RTS to provide greater clarity on expectations.
15. Ofgem will also be investigating the background and detail of the issues that the UK Government has recently identified in poor practice in delivery of solid wall insultation under the Energy Company Obligation. Members agreed that such practice both undermines trust and shows need for effective regulation.
16. A DESNZ consultation on Ofgem’s remit is also open. Ofgem’s own views on both aspects of the consultation and a range of other issues were discussed at a recent UK Select Committee session.
Community Energy
17. As discussed at the September 2024 meeting, the Scottish Government has asked the ECN to expand its remit to include discussion of community energy issues.
18. Discussion with four potential new members to help extend the expertise of the ECN is in process. Local Energy Scotland and Foundation Scotland have both agreed to join, although the Foundation Scotland representative was not able to attend.
19. A broad outline of three types activities under the overall heading was presented:
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- The first is of communities building and owning their own renewable electricity generation, usually as a means of generating income. Wind and hydro are the most common examples in Scotland, although there are also some solar PV projects. The majority of these projects were economically viable only because of support from Feed-in-Tariffs (FiTs), which provide a guaranteed payment for each unit of electricity generated for up to 25 years. The FiT programme closed to new applications from April 2019 and there has been a strong downturn in new developments since that time.
- The second area of discussion is around community benefit from commercial renewable electricity generation. There is, in Scotland, an advisory payment of £5,000 per installed MWh per year, which can result in substantial funding streams for beneficiary communities. Community capacity to make best use of funding has been variable, depending on local capacity. This area is now widening to include community benefit payments from electricity transmission infrastructure – some ECN members including the Chair had attended a Scottish Government Ministerial roundtable on this topic in November 2024.
- The third are of activity is around community energy projects with direct local benefit which do not involve grid-scale electricity generation, such as installation of heat pumps, solar PV and / or batteries in community buildings, or around community transport. These projects typically do not generate income.
20. Local Energy Scotland (LES) provided an introduction to their work, which delivers support to all of the above areas, funded by the Scottish Government, and added detail:
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- LES suggest a current total of at least £30 million per annum for community benefit payments across Scotland; this is expected to rise to £50-60 million by 2030. For comparison, the Scottish Government’s Community-led Local Development Fund, concentrated in rural areas, was worth £11.6 million in 2023-2024.
- A consultation on good practice principles in relation to community benefits payable is currently underway, with a particular focus on the appropriate level of payments.
- Community benefits in relation to transmission infrastructure will be covered by legislation, expected from DESNZ soon.
- As generation expands, more developers are combining local and regional funds to spread benefits.
- While LES is keen to see funds being recirculated to support energy efficiency and fuel poverty alleviation work, experience shows that understanding of and support for community aspirations are critical to success at local level.
21. Members agreed that information sessions on community energy issues would be helpful.
Radio Teleswitch (RTS) Phaseout
22. Ofgem’s figures are that some 525,000 RTS meters remained installed across GB at the end of 2024. EAS noted that to achieve by summer switch-off date, there would need to be 90,000 replacements a month. In December, 26,000 meters were replaced. While this was the highest run rate figure to date, it remains considerably below that needed to meet the deadline of June 30th 2025.
23. In addition:
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- A Smart Energy GB campaign launched last week.
- Targeted campaigns are also taking place in Brighton, Leicester, and Glasgow.
- As above, Ofgem are changing license conditions.
- Ofgem are also looking at technical issues, including the Load Managed Area impact of pre-configured dumb smart meters where no communications exist.
- Both CAS and Changeworks noted that they do not have a dedicated advice code for RTS and hence cannot provide accurate numbers, but both consider that consumer enquiries are increasing.
- Anecdotal feedback is that some suppliers are performing better than others and are making use of local communications hubs to provide smart functionality through the 4G network. While this is helpful in the short term, members raised concerns about the longer term.
- Members also raised questions about affordability, impact on running costs and switching, given the changes of tariffs for RTS consumers. In particular, there were concerns about consumers being transferred to Economy 10 tariffs, given lack of transparency and competition in that section of the market.
Future meeting schedule
24. As agreed at the September 2024 meeting, the ECN will in future meet in person twice a year, in the spring and autumn to allow full discussion. Online meetings on specific topics between these dates will, as now, be arranged as necessary.