Clarity and confidence: building an energy transition that inspires investment and rewards customers

“The decarbonisation of our energy system, the clarity of the clean power mission, are a generational economic opportunity. If we get it right.”

E.ON UK CEO Chris Norbury joined a panel discussion with Energy Secretary Ed Miliband at the first Regional Investment Summit in Birmingham, discussing the need for collaboration between Government and business, and consistency in policy and ambitions – setting the tone for a conversation as much about the cost of living as it was about economic growth and environmental stewardship.

“I would increase the level of focus on the way in which customers consume energy, the way in which homes and businesses consume energy, the electrification, the decarbonisation, unlocking the value of consumer flexibility,” Chris Norbury told the panel. “I think if we do that, and if we target the benefits of that at those people who need those benefits most of all, then we can make the clean power mission work for everybody.”

There is already tangible proof of this approach, with examples of new technology and flexible approaches to energy providing rewards to customers and to the energy system. Adding batteries to customers’ homes alongside a simple flex tariff – utilising Warm Homes Discount Funding as a long-term solution rather than a short-term fix – has been shown to reduce vulnerable customer bills by more than £250 a year, as well as adding extra flexibility to often constrained electricity grids.

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“There are some things that would help that scale further… we really welcome some of the steps that Ofgem have been taking in terms of how flex markets are evolving in the UK, they are some of the most advanced of any market that we operate in around Europe.”

E.ON advocates for enabling consumer flexibility to be traded in multiple markets simultaneously: “Then the value of that flexible home and the savings to the customer goes up significantly. Warm homes plan, you can work with solar, the savings go up. There's a huge opportunity to bring bills down for people and deliver system benefits, and also create a lot of skilled jobs in the process.”

It is a partnership approach that is key to delivering such innovation at community scale, such as E.ON’s strategic energy partner role with Coventry City Council – “a really progressive council and a really progressive city” – which helps to bring wider benefits.

Those wider benefits include jobs and skills, and E.ON’s commitment to skills is evident, with its Clean Energy Jobs Plan that has supported around 800 people annually through E.ON’s Net Zero Training Academy in the West Midlands, along with wider skills initiatives, and welcoming more than 1,300 apprentices across 100 programmes since 2018.

That sense of scale also translates to major infrastructure projects such as district heating networks, where whole blocks of homes, even entire communities, are connected to a central heat source that is often more sustainable and more efficient than traditional alternatives.

As with the companies making significant investments in these new networks, Chris Norbury outlined how consumer confidence is key to making them popular and rewarding for individual consumers – and from there successful in terms of investment and carbon savings.

He said: “We’re a significant and major investor in district heating in the UK and have been for a number of years. We have hundreds of millions of pounds in our plan ready to be invested in heat zoning . . . which absolutely is a great way to invest in cities, invest in urban renewal.

“I'd love to see that regulation and that policy certainty on heating – huge investment opportunity – I think there's a couple of things that we as industry can do to help that: savings message, consumer protection.”

Policy certainty and regional collaboration

But there is more to be done to scale these solutions, specifically the importance of policy certainty when it comes to businesses such as E.ON making long term investment decisions.

Chris Norbury said: “I'm competing for investment with my counterparts in other markets that E.ON operates in around Europe. Having clarity of mission, having policy certainty, makes that competition for capital far easier. We will be investing nearly £2 billion in the UK energy system in the next five years.”

The summit heard E.ON’s view that the best way to deliver the energy transition is to “join up across the whole system end to end, not just talking about the individual components that we work within.”

“The best way you can do that is to work more regionally, work more locally, work around place. If you can do that, and you can do that . . . in a community, then you can start to deliver an energy transition here in the UK that people really feel the benefit of.”

Those comments were echoed by Energy Secretary Ed Miliband who stressed the need for co-operation between policymakers and those with the power behind billions of pounds in investment decisions.

“I say this often. It's that in the endeavour that we're embarked on, this only works with government and business working together,” said Mr Miliband.

“And if there's any area where the word ‘mission’ really matters, it's in this area. Partly because I think we're all motivated by a similar sentiment which is, yes, we're in the – if you like – the disaster avoiding business, so doing the right thing for future generations. But we're also in the better lives business today – about good jobs, about energy security, about lowering people's costs and all those things.”