The rapid development of new technology in electricity supply is disrupting the traditional means of delivery of this essential service. As in other sectors, the consumer is at the heart of these changes and consumer choice will, as never before, determine the service and mix of technology to meet each need.
But such a shift involves risk for the consumer and for the community. With imperfect information systems it is inevitable that consumers will make decisions that are less than optimum and, in some cases, to their detriment. There is consequently a risk of over-reaction by consumers choosing not to participate, or by policy makers creating barriers to technological transformation to avoid harm. There is the prospect though, of a longer term harm as a result of continuing investment in redundant systems, or by over-investment in new systems and early redundancy of existing and useful facilities.
The challenge for policy makers is to facilitate innovation while maintaining the community’s confidence in the long term benefits of change. Effective competition is central to the drive for greater efficiency, but competition can only be effective if consumers are confident and actively engaged. Maintaining the confidence of the community includes identification of the risks and instituting appropriate protection measures.