Written by Alex Wilson,
On 15 July 2015, the European Commission adopted a Communication on Delivering a New Deal for energy consumers (‘New Deal’), as part of the Summer Energy Package. The New Deal is one of several consumer-related actions envisaged in the Energy Union strategy, and is designed to inform future actions in this field, including proposed legislation.
The New Deal highlights the need for greater transparency around energy prices: wholesale and retail prices are diverging as taxes account for a growing share of energy bills, placing a disproportionate burden on household consumers. It emphasises the importance of easy switching between energy suppliers and calls for the phasing out of regulated retail prices, which discourage market competition and investment in infrastructure. The New Deal argues that greater energy efficiency is necessary, demand response among consumers should be facilitated, and community production initiatives encouraged. The Commission considers that rolling out smart meters across the EU is necessary to encourage greater demand response. Yet the precise cost savings for consumers from smart metering (and demand response in general) remain rather unclear, while smart metering has more positive effects when accompanied by incentives to change patterns of energy use (e.g. dynamic pricing). The New Deal calls for new measures to address vulnerable consumers and energy poverty in the EU, with reports by the Commission and European Parliament shedding light on these issues.
The New Deal seeks to encourage the development of smart homes and networks, which will require a range of new energy technologies. The growing use of ICT in smart grids has raised concerns about data protection and the risk of cyber hacking in smart grids. In past resolutions, the European Parliament expressed strong support for key ideas outlined in the New Deal, and has called for consumers to play a more active role in the energy transition.
Read the complete briefing on ‘A New Deal for energy consumers‘.