Annual energy statement: 2020

11. Consumer Engagement

2019 has seen a changeable energy market for Scottish consumers. A number of small and medium suppliers have exited the energy market whilst the largest energy suppliers have seen significant changes, for example, the acquisition of SSE Retail by OVO Energy.

Energy Bills

Electricity and gas prices have risen substantially in real terms from the early 2000s.

Standard credit customers in Scotland pay the most of all customer types. The prepayment price cap may be keeping electricity bills down for prepayment customers.

Fuel poverty

Households in fuel poverty is stabilising. In 2018, 25.0% of Scottish households are in fuel poverty, 11.3% in extreme fuel poverty.

Switching

One in five (20.3%) Scottish consumers switched their electricity supplier in 2019.

Smart meters

1.10 million smart meters were installed in Scotland by June 2020, 39.2% of all Scottish meters.

Geographical differences

Geography seems to play a role in the differences in experiences of Scottish consumers. Those in North Scotland:

• Pay more for their electricity
• Are less likely to switch energy supplier and more likely to be with their ‘home’ supplier, so may not be on the best deal for them
• Are less likely to have a smart meter

than those in South Scotland

Scottish consumers, especially those in vulnerable circumstances, continue to experience detriment within the energy supply market. In order to address this, the Scottish Government followed its commitment in the Scottish Energy Strategy by publishing its Energy Consumer Action Plan in May 2019 and has made substantial progress on the commitments introduced within it:

• The Scottish Government engaged widely with stakeholders on the role, focus and remit of an independent Energy Consumers Commission which will advocate on behalf of Scottish energy consumers and represent consumer interests to the Strategic Energy Advisory Board. The commission met for the first time in July 2020 and will be taking forward its 2020/2021 workplan over the coming months;
• An Improving Consumer Outcomes Fund was launched in November 2019 in order to develop practical innovations to address instances of intractable consumer detriment that can be adapted, adopted and scaled up by existing service providers. Under stage one, we supported six projects to undertake feasibility work at the start of 2020;
• Research has been commissioned into challenges facing energy consumers, giving insights into consumer considerations for decarbonising heat and transport. This will inform our approach to the lively public debate that we will encourage throughout 2020 and 2021, taking into account the circumstances of the COVID-19 situation;
• The Scottish Government has engaged with developers of energy charter models throughout the UK and in other nations;
• The Scottish Government has called on the UK Government and Ofgem for reforms on a number of areas of detriment to consumers, including the high number of restricted meters and challenges facing rural consumers; and
• The Scottish Government has worked closely with energy companies as part of the COVID-19 pandemic response, pushing to ensure that energy consumers, particularly those in vulnerable circumstances, are supported.