EDF Energy – Powering a sustainable future

EDF Energy also plans to help its customers cut their carbon dioxide emissions by 15 per cent by 2020. The company sells energy to five million UK households a year. Currently, 300,000 customers have signed up to its “read, reduce, reward” scheme, a tariff that rewards customers with nectar loyalty card points for cutting their domestic energy use.

Ferguson says: “It’s quite weird for an energy company to reward customers for using less.” Customers benefit by giving the company accurate meter readings, meaning they get more accurate bills and so a better understanding of their energy use.

As EDF Energy encourages customers to use less energy, it is changing its business model by moving into energy services – advising corporate clients on how to cut their energy use to meet European energy efficiency laws. It also advises UK customers on how to prepare for the proposed carbon reduction commitment, the emissions trading scheme for non energy-intensive industries such as supermarkets, banks, hotels and hospitals.

Ferguson says: “We’re making small steps towards the energy services model. What it requires is much greater engagement of customers with energy, [and] between us and our customers, than is really there at the moment.”

EDF Energy does not know the exact number of its fuel-poor customers, Ferguson admits. He believes energy companies could do much more to share information on vulnerable customers. This could include gaining access to lists of benefits claimants, who tend to be in fuel poverty. The company says it will work with the regulator, Ofgem, and the government to find ways to better identify which customers should be on a “social tariff” – a cheaper energy rate for poor households.

The company was the first UK energy supplier, in 2006, to introduce a social tariff. The discounted rate saves 50,000 customers up to around £150 a year compared to standard rate electricity and gas customers. The company has helped a further 8,000 indebted customers pay fuel bills since 2003. Under its “social commitments”, a set of social targets launched earlier this year, EDF Energy plans to help another 15,000 customers who are in debt pay fuel bills from the fund by 2012.

According to Energywatch figures, the average annual fuel bill for an EDF Energy customer using a pre-payment meter would be £1,037 (based on June prices). That is £72 more than the £965 bill for an EDF Energy customer paying by direct debit. This is the lowest differential in the industry. The largest is charged by British Gas, whose pre-payment meter customers must pay £176 more a year than those that pay by direct debit.

EDF Energy has a leading position in addressing the needs of the poorest customers. But with average UK energy bills already over £1,000 a year and rising, all energy suppliers will be under pressure to cut margins by refusing to pass on soaring wholesale oil and gas prices to customers on all incomes. How EDF Energy responds to this much bigger challenge could be the real test of its social commitment.

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