“You need to become a consumer expert in energy” was the advice as I started a new role at BEUC. A completely new file and a steep learning curve lay ahead. But when I told people about my new endeavour, I did get slightly alarming comments. “Energy is extremely complex” or even “Know what you are getting yourself into”.
So, what did I get myself into? Here’s a review of what I have learnt six months later.
1. 27+ energy markets
Energy is undergoing profound changes as we face climate change and unstable global politics.
BEUC’s take is that a well-managed switch to renewables, energy efficiency, and housing insulation will improve consumers’ well-being and reduce energy bills.
A lot of EU legislation exists to this effect. However, I quickly discovered that we are still dealing with 27 national markets, over 30 if you take a comprehensive view of Europe.
We must encompass the diversity of people
“Unity in diversity,” the EU’s senior energy official called it recently.
So, when speaking for the ‘energy consumer’ we must encompass the diversity of people and integrate widely varying national approaches.
2. Energy efficiency first
Go to any energy meeting and someone will rightfully say: “the cheapest energy is the energy we don’t use”.
But living in a rental flat, I often feel constrained in what I can do to adapt my energy behaviour. The advice I received is to focus on things I can control (this may also apply to life in general, but that’s beyond this post).
Working at BEUC for some years, I – by osmosis, so to speak – had already learnt about energy-efficient choices. So I changed my light bulbs. I am mindful of laundry temperatures, use the ‘eco setting’ on appliances, and when my dishwasher broke looked for an energy label ‘A’ replacement.
Above: for renters, energy efficiency interventions are often limited to switching to LED lightbulbs
Seasonal advice also helps. For instance, Which? taught me that the best draught-proofing is free.
My next challenge: convince my landlady to request smart meters for the building.
3. Catering to different needs
With increasing renewable energy, there is value in households shifting their consumption from peak to off-peak. This is ‘flexibility’ [1]. It can reduce pressure on the electricity grid, limiting expensive investment to expand it, and lead to lower energy bills.
As EU energy regulators note, “not all consumers can easily adjust or may want to adjust to frequent pricing changes”. BEUC therefore advocates for consumer choice between different electricity contracts. This can range from fixed-price (for those who prefer security), to variable, dynamic (where the price fluctuates based on actual market conditions), and other ‘hybrid’ options with varying levels of flexibility.
I observed that what qualifies as an ‘interesting offer’ will differ between countries and consumers – have a look at the pros and cons of more flexible price contracts in Denmark, Germany, and the Netherlands.
4. Making new energy schemes work
Bloomberg recently wrote that “many people describe a small nudge — like shifting washing times to take advantage of cheaper power prices, or adding insulation to improve energy-efficiency — as the first step [to monitoring one’s energy use].”
What kind of nudges and options exist to help consumers save money on their bills? Why is a specific contract (not) attractive? Are we missing any consumer protection? These are questions BEUC is researching.
Take ‘energy sharing,’ which can give people without solar panels (like myself) direct access to renewable energy from their community. Are these schemes working? Experts have many ideas to ensure they do – like template contracts or standardised pre-contractual information – that are worth exploring.
5. Fairly allocate grid costs
The EU’s energy regulator recently asked BEUC about how ‘network tariffs’ – what consumers pay to use the electricity grid – should be designed. Our response? There are more questions than answers.
One crucial message: Fairly allocate costs
But there is one crucial message: Fairly allocate costs. This is to ensure that consumers do not overpay for grids. Austrian consumer group Arbeiterkammer highlighted that households pay disproportionately more for the grid than large-scale industry.
Policymakers need to carefully manage costs to households of the energy transition, even when operating in the context of an EU increasingly preoccupied by lowering (energy) costs for industry. That’s understandable. But the benefits must be mutual since products made by a competitive EU industry will have to be…purchased and used.
6. Barriers are as diverse as consumers
BEUC is now focusing on removing the barriers, regulatory or otherwise, that prevent consumers from making decisions in favour of sustainable energy.
For example, electricity is taxed more than other energy sources, as Belgium’s Testaankoop/Testachats highlights. As a result, it is on average 4.1 and 3.6 times more expensive than gas and fuel oil respectively, undermining the financial attractiveness of heat pumps.
Above: price signals for electricity are often not attractive enough
Price is just one barrier. Spanish consumer organisations published a diagnostic of administrative, social and other issues faced by consumers when trying to share electricity. Citizens Advice provided suggestions to the UK government to overcome (perceived) barriers to flexibility due to factors including physical health needs, household composition, neuro-diversity, and much more. I like how one person suggests a ‘try before you buy’ option for flexible services and products.
7. ‘David vs. Goliath’
…is how BEUC’s outgoing Director General qualified energy as she reflected on her career, saying it’s a consumer file “that is difficult to promote, because the other stakeholders are just so powerful”.
That reality keeps my learning curve steep. Who said “energy is extremely complex” is probably right, but I am enjoying my time in this field.
[1] As per the EU’s 2024 internal energy market regulation: “the ability of an electricity system to adjust to the variability of generation and consumption patterns and to grid availability, across relevant market timeframes.”