DNV Metoder Kunddialog Ei (2021)

Consultant report commissioned by Ei (Energimarknadsinspektionen). DNV (DNV Energy Systems), September 2021. Review of methods for customer dialogue, based on a literature pre-study and interviews with seven energy regulators and five other organisations — regulatory process methodology for Ei, motivated by Ei’s need to understand customers’ drivers and preferences regarding demand flexibility.

Commissioning body: Ei (Energimarknadsinspektionen)

Report no.: 10287469, Rev. 3, final version (~70 pages including references and one appendix)

Context: Ei considers increased demand flexibility from active customers an important precondition for the future power system, and wanted better knowledge of methods that capture customers’ views and drivers in rule and policy development; not a flexibility market study

Scope and method

The report has three phases: a pre-study (research on behavioural insight and citizen-participation methods, plus a survey of methods used by European and non-European regulators, consumer organisations and others), in-depth interview case studies, and an analysis proposing criteria for choosing a method. The interviews cover 12 organisations — seven energy regulators and five others (Ei selected ten; National Grid ESO and Cadent Gas were added on Citizens Advice’s recommendation) — and address four questions:

• What need or purpose drove the customer engagement
• Which methods are used and why they were chosen
• What experience the organisation has of them
• What the key lessons are

The 12 organisations interviewed:

1. Ofgem (Great Britain) — Consumer First Panel, Consumer Challenge Group, and RIIO-2 requirements on network companies to run their own stakeholder engagement
2. CRU (Commission for Regulation of Utilities, Ireland)
3. ACM (Autoriteit Consument en Markt, Netherlands)
4. E-Control (Austria) — electricity and gas regulator; single point of contact for consumers
5. ARERA (Italy) — Autorità di Regolazione per Energia Reti e Ambiente
6. AER (Australian Energy Regulator)
7. OEB (Ontario Energy Board, Canada)
8. National Grid ESO (Great Britain) — electricity system operator, regulated by Ofgem under RIIO
9. Cadent Gas (Great Britain) — gas distribution network operator, regulated by Ofgem under RIIO
10. BEUC (European Consumer Organisation) — pan-European advocacy perspective
11. Citizens Advice (Great Britain) — official consumer body for energy; member of Ofgem’s Consumer Challenge Group
12. BIT (Behavioural Insights Team) — applied behavioural science for governments and regulators

Key themes

Deliberative methods

Ofgem, CRU, AER and OEB use deliberative methods systematically, alongside more traditional ones, to reach consumers and smaller businesses and offset the imbalance versus professional stakeholders. Ofgem’s Consumer First Panel (about 80 participants, informed on topics beforehand, with policymakers often attending) is one example; OEB’s in-person panels are valued for depth but are costly and show some group-think. The report stresses that a higher degree of deliberation is not inherently better; it mainly carries higher participant expectations of influence.

Consumer vulnerability

Vulnerable customers appear as a recurring focus in the regulator case material: Ofgem puts particular focus on the most vulnerable, CRU’s suppliers’ handbook contains rules on vulnerable customers and CRU commissioned a survey of vulnerable groups via a third party, ARERA provides special support to vulnerable customers, and E-Control has published evaluations on energy poverty. Several regulators reach hard-to-reach and vulnerable groups through third parties with an established customer base. The report does not analyse vulnerability in relation to flexibility or dynamic pricing.

Behavioural science integration

The BIT interview and the pre-study cover behavioural insight (BI) in policy development: the OECD BASIC process, and BIT’s MINDSPACE and EAST frameworks (which include defaults, social norms and commitments among their levers). BIT recommends building behavioural-research competence, internally or externally, into governments and regulators, and Ofgem stresses that people act differently from what they say in hypothetical situations. BI-based methods are excluded from the report’s later method-selection analysis. The link to Demand Response design is a wiki inference rather than a claim of the report.

Lessons across the case studies

The report’s synthesis: choose the method from what you want to achieve (clear goals and expected results); no single method fits, and most interviewees combine qualitative and quantitative ones; involve a broad range of consumer types; use the data regulators already hold (e.g. a data-analysis team); and outsourcing can help — to a third-party firm (OEB, E-Control; OEB cites perceived impartiality) or to network companies through requirements and guidance (Ofgem, AER). National Grid ESO and Cadent Gas found early Ofgem guidance on stakeholder engagement unclear. ARERA’s self-governing Observatory found it hard to produce concrete results.

Relation to flexibility content

This report is a regulatory process methodology document, not a study of flexibility markets, actual consumer behaviour toward demand response, or technical standards. Its flexibility link is Ei’s motivation (small-customer demand flexibility is large in potential but rarely used, suggesting weak incentives and/or high barriers) and section 4.2.1, a worked example of selecting a dialogue method for the question of to what extent and on what conditions customers can contribute flexibility. The example is explicitly illustrative, reflects no actual Ei deliberations, and ends with structured dialogue forums under its assumed criteria; the report does not give a definitive recommendation.

Indirect relevance:

• The BIT behavioural insights material (wiki inference) connects to the behavioral change dimension of demand response identified in Source - IVL Konsumentperspektiv Efterfrågeflexibilitet (2023)
• The international comparisons provide context for how Ei approaches its consumer engagement role as Sweden’s electricity market regulator

Relation to existing wiki content

• Ei: Documents Ei’s investment in improving its consumer engagement methodology as a regulatory function; international benchmarking context
• Demand Response: Vulnerability framework and behavioural insights material as process context (low priority relative to AFRY and Ramboll)