Policy article

GUEST ARTICLE: What needs to be in place to ensure smart data in the energy sector works for consumers?

Smart data schemes in the energy sector could reduce household energy bills and enable sustainable choices. Nationally, it could help strengthen competition and innovation in the energy sector and accelerate the UK's Net Zero goals. But consumer data-sharing of this kind is new to the energy sector, so we asked three experts at the UK government's Smart Data Council: ‘What needs to be in place to ensure smart data in the energy sector works for consumers?’
7 min read
Caroline ClaytonSenior Policy Adviser

Smart Data gives consumers the ability to share their data with businesses and other organisations, enabling new uses of data in ways that benefit consumers, society and the economy. 

One of the key areas where smart data can deliver significant impact is the energy sector. As of 2023, smart meters are present in 60% of UK households and are projected to deliver  £5.6 billion in home energy bill savings over the course of their implementation. 

An energy smart data scheme could further enhance these benefits by collecting data from smart meters, connected devices, home energy management systems, and other digital sources. These combined data streams allow consumers to manage their energy consumption or share the data with an energy service provider to access better services. 

Such a scheme could play a critical role in helping the UK meet its legal obligation to achieve net-zero carbon emissions by 2050. 

Which? has argued that an energy smart data scheme has the potential to empower consumers to use their  data to access new, innovative products and services that make their lives easier and their bills cheaper. For example:

  • Reducing network costs and therefore consumer bills, through the use of demand side response that balances supply and demand in an energy system increasingly reliant on renewable energy. 

However, it is essential that energy smart data schemes are rolled out the right way. Our recent policy paper ‘Building Consumer Trust in Smart Data’ identified risks of consumer harm in poorly-implemented smart data schemes, such as poor quality products and services, lack of meaningful consent, risk to consumer safety and the exploitation of vulnerable consumers. Our research also found that such failings could lead to consumer distrust and disengagement, reducing the possible reach and positive impact of smart data in the energy sector.

We spoke with experts from Citizens Advice, Icebreaker One, and Ofgem, each of whom sit on the UK government's Smart Data Council, to ask: ‘What needs to be in place to ensure smart data in the energy sector works for consumers?’. 

Accountability and accessibility

Colin Griffiths (Policy Manager), Citizens Advice:

Citizens Advice is a UK-based charity that provides free, independent, and impartial advice to individuals on a wide range of issues, including benefits, employment, housing, and debt. Citizens Advice also conducts policy research to understand the problems people face and to influence positive change in policies and practices. 

“If I could attach four sticky notes to the desk of everyone working on Smart Data they would read:

  • Transparency
  • Control
  • Accountability & Redress
  • Plain English

Transparency: People want to know, or be able to find out, who is accessing their data, in what detail and for what purposes. Few things erode trust faster than a sense that your data has been lost to the void of “trusted third parties” the moment you sign up.

Control: People want to be able to make choices, and change their minds, about data sharing. The more people learn about and use smart data the more important control becomes for them. In 2019 89% of people told us opt-outs were important, this grew to 92% by 2024. The people who care most are those who make the most of use of data-enabled services. 

Accountability & Redress: There’s nothing worse than a game of accountability ping-pong between organisations when there’s a problem. A single point of contact is needed. I sometimes hear an assumption that the existence of GDPR and the ICO covers this with no further work needed. This is not the case. Energy consumers have the Ombudsman and a statutory consumer advocate to help escalate and address issues but no similar roles currently exist for data. Additional work is needed to ensure consumer confidence.

Plain English: Everything above fails if people can’t understand or access it. Too often key information is buried in impenetrable terms and conditions. I’ll always remember attending a focus group of members of the public on smart data where one gentleman summarised the groups’ feelings on this: “they know I won’t read all that and that if I do I won’t understand it”. Simple one-pagers explaining all of the above are vital.”

Joined-up and open

Gavin Starks (Chief Executive Officer and former co-Chair of the Smart Data Council), Icebreaker One:

Icebreaker One (IB1.org) is a UK-based non-profit focused on enabling trusted, interoperable data sharing across sectors. It develops data infrastructure, governance, and policy frameworks to unlock the value of data for economic growth, better policy, and net zero innovation.

“The UK’s new Data (Use and Access) Act sets the stage for Smart Data to transform how we engage with energy. But the real question is: will it work for customers?

Done well, Smart Data will help customers save money, reduce hassle, and make greener choices. None of that happens by accident: it takes more than just apps and dashboards to create a consistent market approach that customers can trust. But, with the right foundations, data sharing can be safe, simple, and meaningful.

Our work with Open Energy focuses on improving access to energy data in the UK. And with Perseus we’ve already seen how smart, secure data sharing can unlock innovation for green lending. But, to deliver real benefits, Smart Data schemes must be joined up, open to everyone, and verifiable so that everyone in the value chain can trust that data is being handled responsibly.

By 'joined up’, I mean that schemes should make it easy for organisations from different sectors to work together; connecting them through commonly agreed rules. This isn't a technical detail; it’s essential to creating a functioning smart data ecosystem that works for everyone. 

‘Open to everyone’ means both consumers and businesses can access and benefit from the market. Grounded in open standards and transparency, schemes should promote competitive innovation while encouraging cross-sector collaboration - providing consumers with more choice and better services. 

By ‘Verifiable’ I mean, consumers must be able to trust that their data is being used responsibly. To achieve this, data infrastructure and data access, usage, and governance must be transparent, auditable, and rights-based.

As the whole energy system in the UK is becoming digital - from power plants to domestic batteries to electric vehicles (EVs) - data becomes critical to make the market fairer, easier to navigate, and more responsive to people’s needs. Our collective challenge is to deliver services that put customers in control and make Smart Data something they can easily benefit from, not something they have to figure out.”

Privacy and control

Charley Clark (Principal Policy Expert), Ofgem:

Ofgem is the independent energy regulator for gas and electricity markets in Great Britain. Its main role is to protect consumers by promoting fair prices, ensuring energy security, supporting the transition to net zero, and regulating energy companies.

“At Ofgem, we’re working to enable consumers to share their energy data securely. One example is our Consumer Consent Solution, a digital service which will allow people to consent to share their energy data with trusted third parties, like energy services, without compromising privacy or control. Consumers can select not just who they trust to share their data with, but what data, and for what purposes. 

Crucially, it puts consumers in the driving seat, giving them more choice and control over how their data is used. 

We’re working with the Retail Energy Code Company to develop the digital service that will enable energy consumers to easily control who they have shared their energy data with through a digital consent solution that will allow them to manage those permissions and revoke them if needed.

By building trust and giving consumers the tools to manage their data, we can ensure that smart data delivers real benefits for consumers such as lower bills, reduced carbon emissions, and a more personalised energy experience. However, it starts with ensuring consumers are able to retain control over their data and their privacy.”

Scaling up for greater consumer benefits

For smart data schemes to truly deliver benefits in the energy sector, consumer control must be at the core. That’s why Which?'s model for smart data trust frameworks places consumer consent and control front and centre, as something that must be built into smart data schemes from day one and upheld throughout the scheme’s product and service lifecycles. Meaningful consent, backed by principles of governance, scalability and protection, is essential to ensuring consumers remain in control and develop trust in smart data. 

The principle of scalability within our trust framework will be the mechanism in which smart data achieves impact in the energy sector. It includes the technical infrastructure necessary for interoperability and the integration of new data sources. It emphasises accessibility for a diverse range of consumers, ensuring inclusivity and fostering a wider array of innovations. Finally, it promotes the use of a common language, aiming to provide a clear and seamless consumer experience across businesses and organisations in the smart data energy scheme.

To learn more about how to embed consumer trust in smart data, explore Which?'s trust framework. This article is part of our new blog series examining the role of smart data in shaping society, the economy, and the digital future. If you missed it, catch up on the launch article on: 'What learnings should future smart data schemes learn from open banking?'.