Energy Systems Catapult has partnered with Electricity North West and Impact Market Research Ltd. to better identify Low Income and Vulnerable (LIV) customers, and to understand their energy needs and attitudes. The partnership, which is funded by the Network Innovation Allowance, will also assess how best to engage with LIV customers and will determine how to support them during the UK’s transition to Net Zero.

The partnership will provide the UK’s 14 licensed Distribution Network Operators (DNOs) with a better understanding of the individual needs of LIV customers, meaning that the service and support they provide is better targeted to meet a customer’s specific requirements and is delivered more consistently.

The challenge facing the energy sector and its engagement with LIV customers was most recently revealed in a report from the RIIO-2 Challenge Group[1] on electricity distribution business plans. The report revealed how DNOs do not generally understand LIV customers and their energy needs and priorities. The report identified a national variation in the way that DNOs managed their relationship with, and activities designed to support, LIV customers.

With LIV customers typically classified in a one-dimensional manner (age, disability, income etc.), and with their views often represented to DNOs through the filter of interest groups such as Age Concern, DNOs do not necessarily have a full understanding of how to classify LIV customers and their energy priorities.

Impact Market Research Ltd. will lead the study into energy needs and attitudes, and engagement with LIV customers and will be supported by Energy Systems Catapult. The research will be conducted at the national level to ensure there is representation of all energy supply regions. While the focus is on DNOs, Gas Distribution Networks (GDN) will be represented, meaning that the learnings can be applied cross-vector, enhancing the energy sector’s responsiveness to customer needs.

The programme of engagement will directly target LIV customers through a combination of online surveys, telephone/face-to-face interviews, and focus groups to generate an understanding of their views and opinions on their energy needs based on their lived experience. It is hoped that by delivering an approach shaped by lived experience, DNOs can support LIV customers while reducing the cost to serve them, heightening the social return on investment, and improving their readiness for future vulnerabilities and changing energy markets.

Steve Morley, Project Lead – Utilities Division, Impact Research, said:

“This research approaches the important issue of customers in vulnerable circumstances in a fresh and open way. By focusing on customers’ needs first and only then on their defining characteristics, the aim is to provide energy network operators with a better understanding of how best to serve and support customer in more targeted and efficient ways.

Steph Trubshaw, Electricity North West Customer Director, said:

“We want to ensure that those people in the most vulnerable circumstances in our region can benefit from our innovation and the future energy transition so that no one is left behind. This project is the first of its kind and will help us understand more about the specific energy needs of our customers so that we can ensure we can continually improve our service.”

Marc Brown, Business Lead– Homes at Energy Systems Catapult, said:

“Together with Electricity North West and Impact Market Research, we are taking a fresh approach to a widely researched challenge. Our approach will redefine the energy needs of LIV customers and their associated vulnerabilities and do away with oversimplistic categorisations by characteristics. Such an approach will support efficient targeting and delivery of electricity – and to some extent, gas – services.

“The findings of the research will help the energy sector respond to the changing needs and priorities of customers and move beyond one-dimensional classifications to help us navigate the Net Zero transition for the benefit of all individuals.”

[1] https://www.ofgem.gov.uk/publications/riio-2-challenge-group-independent-report-ofgem-electricity-distribution-business-plans