Recent developments in technology such as solar power, batteries, and smart thermostats and appliances could radically increase competition in the energy market, bring down bills and secure a decarbonised energy system, a think tank has claimed.
The study from IPPR, the Institute for Public Policy Research, argued that support for rapidly developing renewable technology, such as solar power and new smaller “smart” technologies would lead to lower bills, a more efficient energy system and low-carbon generation subsidies which would boost local communities, rather than big utility companies.
Experts recommended a raft of measures to help reform the industry including an automatic fine for the “Big Six” for overcharging “legacy customers”, an investigation into opening up trading in the wholesale energy markets and large-scale deployment of solar power into the electricity system.
The report said that the Big Six energy firms, including ScottishPower and Perth-based SSE, needed to ensure that customers who had signed up to their payment plans in the past were not stuck on tariffs which were far higher than those offered to those more recently transferring to a utility provider.
Will Straw, IPPR associate director, said: “Distributed electricity technologies such as solar power, batteries and smart thermostats give reason for great optimism but they are being held back by a bias in both policy making and regulation which favours the large-scale utility business model.
“A fundamental change in direction is required so that the innovative businesses and entrepreneurs developing these new technological solutions have a level playing field with the incumbent utilities.
“It is time to break with the past and embrace the brighter new future that these technologies offer.”
The IPPR called for a “reorientation” of UK government support towards the full range of smart distributed technologies and away from the large-scale, centralised utility model.
The report said: “The government should acknowledge that the nature of electricity technologies is now so diverse that it is impossible to adopt a technology-neutral approach.”
Jenny Hogan, Director of Policy at Scottish Renewables, said: “The kind of technologies highlighted in this report are already playing an important part in UK energy generation – and have an even bigger part to play in the future.
“Small-scale renewables are increasingly popular across Scotland’s households, communities, farms and businesses. This reflects a desire among individuals and groups of people to harness the power of renewables to take control of their own energy futures.”
A Scottish Government spokesperson said: “The Scottish Government has a target of seeing 500 MW of renewables in the community and locally-owned by 2020. The Fraser of Allander Institute has now estimated that this target will be worth up to £2.2bn over the lifetime of associated projects.”