Sustainability First’s New Energy and Water Public Interest Network (New-Pin) has been set up to explore the long-term public interest in the energy and water sectors. This rather begs the question: what is the public interest and how can such an amorphous concept be of any use when making real decisions?
Discussions about energy and water services in GB have frequently focused on consumer interests. In the early days following privatisation, these tended to be interpreted as the interests of current consumers and were often viewed as short term and transactional.
Things have changed in more recent years with regulatory duties being extended to include the interests of future consumers, sustainability and most recently in water, resilience. Unlike in Ofcom, however, the remits of Ofgem and Ofwat have not been extended to include the interests of citizens.
Several trends are now starting to blur the differences between these different groups. As policy costs are increasingly met through bills rather than taxation, what is a consumer versus citizen issue may become less clear-cut. Digital technologies are also changing boundaries. With social media, you no longer need to be a customer of a company to express your views and have a direct impact. An increasing interest in localism, regionalism and nationalism is raising questions about identity and what sort of services different communities want. This is coinciding, particularly in the energy sector, with the emergence of new technologies that enable people to join together to generate their own supplies or to become individual ‘pro-sumers’.
Given these changes, thinking of the public interest as an amalgam of consumer, citizen, environment and investor interests may be sensible. The timescale over which the public interest is viewed would also seem important.
The energy and water sectors provide essential services that are key to public, environmental and eco-system health. Victorian infrastructure shows us that these are sectors that can have very long asset lives. They are services of national strategic significance that are fundamental to security of supply and economic development. As such, it is vital that a long-term perspective is taken when thinking about the public interest in these areas.
Taking a long-run view can, of course, be difficult. Future generations by their very definition frequently lack a voice. We innately prefer jam today to the promise of jam tomorrow, which makes thinking about, and addressing, long term issues particularly difficult. Short term political cycles and an over-load of existing data and quarterly statistics can accentuate the pressure to think more about the very real challenges of today rather than those of tomorrow.
But as energy and water are essential services, the public interest in the sectors will be continuing. Seeing it through a ‘rolling window’ where the interests of today and tomorrow can start to merge may be helpful.
There are clearly some real and knotty differences between the views of some consumers, citizens, environmental groups and investors. Whilst there is real value in building greater alignment between different groups, we shouldn’t shy away from the differences.
Exploring other perspectives and increasing the understanding of the values and incentives of different groups is essential if we are going to get to grips with questions of inter-generational equity. A transparent, inclusive and iterative process is also important. Such a herculean task will no doubt involve some trial and error.