By Antonio Pasolini — Two sustainability non-profits have compiled a report claiming the main energy suppliers, or the "Big Six" of the UK market, need to change their business models and practices if they want to thrive in the future. The report is being launched in the wake of fundamental changes to the energy market announced by the government.
Forum for the Future and Friends Provident Foundation based their report on fresh insights from a group of six former utility company CEOs, energy ministers and high-ranking civil servants who provided their insider knowledge about the transformation of the UK energy system.
One of the warnings that the reports bring up is that forecasts for renewables and battery storage costs and their deployment have been underestimated, and that the industry is not prepared to deal with the speed of change. The traditional models of large power stations and passive consumers is giving way to a distributed, renewable, digitised and consumer-led approach.
The Big Six utilities must shift from centralised fossil fuel generation to focus on mainstreaming smart energy services and local renewables, write report contributors Volker Beckers, Joan MacNaughton and Ian Marchant, in a joint open letter published in the Sunday Times newspaper.
Recent figures show how much the energy landscape is changing. The number of UK homes, communities and businesses that generate their own renewable power has increased to 900,000, up 12,000 percent from 2010. Meanwhile, the UK's largest utility, Centrica, has lost 50 percent of its market value since 2013.
Elsewhere, transport and heating are still heavily reliant on fossil fuels and this represents a major challenge, the report highlights.
“It’s important that the large energy companies that have dominated for so long are playing their part to the full so we don’t lose the expertise and valuable assets they have built up. That means rapidly making decentralised, community and smart energy systems their core business, not innovation trials on the side," said Will Dawson, lead author.
Read the full report here