Introducing ‘Open Banking’ style measures to the energy market can make it easier for business owners to exchange providers and access cheaper tariffs, depending on new proposals by the Federation of Small establishments (FSB).
Open Energy: Using data to develop a smarter, cheaper and fairer energy market, commissioned by FSB and maded by Fingleton Associates, highlights how data can be used by customers – and those that represent them – to help make better and more informed decisions relating to energy service.
The report helps guide you energy data can be shared and used – within a secure and safe way – to empower customers and underpin the smart and sustainable energy market for the future.
The Open Energy concept is able to bring various critical reforms for the market, including:
- Standardising tariffs along with other relevant market information in machine-readable formats to enable automated comparisons of one’s tariff offerings.
- Making smart meter data available by having a secure standardised Application Programming Interface (API) to approved others.
- Allowing energy customers to delegate contract switching powers to 3rd party intermediaries.
These reforms would increase switching rates and prepare opportunities for innovative uses of data, including for demand-management purposes that will enhance the proportion from the total energy mix from renewables.
Commenting within the report, FSB National Chairman, Mike Cherry, said: “Smaller businesses are usually the worst hit by a power market that only doesn’t help them. Excessively we hear stories of smaller firms being overcharged or being stuck to the most valuable tariffs.
“Because of this , we want an open and transparent energy market allowing small companies to adopt management of their data and utilize it – with an intermediary if they choose – for top level energy deal, switch providers, reap the benefits of smart technology, manage how and when they will use their energy, as well as the achievements generated.
“Open Energy, like Open Banking, has the potential to transform the market industry – if implemented correctly. It would help business owners being more energy efficient and empower these to make energy choices which have been cleaner, greener plus more sustainable.
“Smaller firms are actually playing an essential role to help united kingdom be more cost effective and reducing our addiction to dirty energy. If adopted, these reforms would make it more convenient for more small enterprises to relax and play their part.”
Fingleton Associates CEO, John Fingleton, said: “It is especially clear that households and small companies buying energy in britain find the market somewhat confusing and aren’t always in the position to switch with assurance. Also, it is clear that switching may bring huge benefits regarding price reduction and better service, and long run in forcing suppliers being every more efficient and attentive to consumers, also in rewarding latest entrants.
“Open energy is needed address this fundamental problem that underlies competition concerns during the energy sector. It will enable customers to switch optimally with minimal effort, lowering their bills and increasing productivity inside the sector.
“More generally, opening data along the economy, and giving individuals control over the knowledge they produce and allowing innovators to blend data from areas like banking, energy and beyond to make powerful tools for simplifying people.
“This may result in a great unbundling of services from the complex offerings that are great for incumbents for the cost of customers, towards models that will be straightforward to grasp. We’ve been already opening banking around such a approach, along with is the next step – but the more we open up, greater powerful the combinations may perhaps be.”