DESNZ consultation on Consumer-led flexibility: consumer engagement - Which? response

Executive Summary

Which? welcomes this opportunity to respond to the Department for Energy, Security & Net Zero (DESNZ) consultation on Consumer-led flexibility: consumer engagement. Achieving the UK's net-zero carbon emissions target by 2050 necessitates a significant increase in the use of energy flexibility options by consumers, offering substantial benefits to them. The ambition for growth in flexible energy options is therefore high. In 2023, Ofgem outlined its aspiration to ‘grow the role of domestic DSR [demand-side response] to something that is utilised by the majority of consumers.’   

However, our research on smart tariffs has shown that there are significant frictions throughout the customer journey, from low levels of initial awareness and narrow understanding of options, through to difficulties in the research and decision-making processes. We therefore support action to address the range of frictions we have identified. The proposed Consumer-Led Flexibility (CLF) consumer engagement framework represents a positive step, and we wish to contribute our research and insights to help develop an effective framework. 

We would particularly like to highlight: 

• Focus on outcomes: There should be less focus on the process of intervention as opposed to the desired outcomes. Ofgem’s ambition implies that at least 21-30% of consumers will be on some form of modern smart tariff within the next ten years (up from 2.3% in January 2025). This is a fast rate of increase and setting clear objectives and key measurable results / indicators will be crucial for any intervention. Government should then allow any designated organisation sufficient freedom in how its objectives are achieved.
• Effective Governance: Robust governance will be important to ensure objectives are achieved and market distortions minimised in this evolving market. Our research on harnessing consumer power provides a range of case studies that should be of use.
• Evidence-Based Interventions: Interventions to increase consumer engagement should be based on experimental and evaluation evidence of what works, including ensuring that approaches are tailored to different consumer groups. A designated engagement organisation should have the resources and remit to base its interventions on in-depth consumer research.
• Agreement that no new organisation is required: We agree that there is no need to establish a new engagement organisation as there are several bodies that consumers are likely to already be aware of that could fulfil this function.