DESNZ consultation on proposals to introduce a specific licence for Demand Side Response Service Providers (DSRSPs) - Which? response

Summary

Which? appreciates the opportunity to contribute to the Department for Energy Security and Net Zero (DESNZ) consultation regarding Smart Secure Electricity Systems licensing. We support DESNZ's proposals to introduce a specific licence for Demand Side Response Service Providers (DSRSPs), particularly to ensure that consumers have adequate levels of protection. While many protections can draw from existing supply licence frameworks, it is crucial to tailor these measures specifically for Demand Side Response (DSR) to foster consumer trust and confidence effectively.

Key Considerations 

• Consumer Protection Laws: Existing consumer protection laws, such as the Consumer Rights Act 2015 and the Gas and Electricity (Consumer Complaints Handling Standards) Regulations 2008, are insufficient for the integrated and complex nature of DSR services.
• Tailored Regulatory Approach: A tailored regulatory approach that recognises the interdependence between DSR services and energy supply is necessary. Specific licensing and regulatory measures for DSRSPs will ensure comprehensive consumer protections.
• Uniform Protection Standards: Ensuring uniform protection standards across energy supply and DSR, such as mandatory Standards of Conduct and requirements for Alternative Dispute Resolution (ADR) schemes, will foster consumer trust and confidence in the market.
• Role of Ofgem and CMA: A new licence with protections would primarily position Ofgem as the enforcer of consumer protections for DSRSPs, leveraging its expertise within the energy sector. However, the Competition and Markets Authority (CMA) should retain the ability to step in if necessary, ensuring robust enforcement.