Accenture Study: Consumers call for strong government intervention in energy market

Accenture News NEW YORK; March 9, 2010
Three out of four consumers are concerned by energy and climate change issues, but nearly two thirds say that using less energy is not the answer to reducing reliance on fossil fuels or foreign energy supply, according to global research by Accenture (NYSE: ACN). The survey of 9,000 individuals in 22 countries also shows that almost nine out of ten consumers want more government intervention in the energy market.
 

The Accenture New Energy World Survey reveals that:

• 90 percent of consumers are concerned or extremely concerned by rising energy costs and 76 percent by the prospect of energy shortages. 
• 83 percent are concerned by climate change and 80 percent by the level of local air pollution.
• 77 percent are concerned or very concerned about their country’s reliance on other countries providing oil and gas. 
• 89 percent think it important or very important to reduce their country’s reliance on fossil fuels.

However, only a third of respondents say cutting energy should be the top priority in addressing energy issues:

• 37 percent say using less energy is the answer to limit their country’s reliance on fossil fuels, and 36 percent say that using less energy is the answer to reducing reliance on foreign countries providing oil and gas. 
• Two thirds (63 percent and 64 percent, respectively) believe the solution to these challenges lies in developing low carbon sources of energy.

“We cannot address climate change or energy security unless we both create new sources of clean energy and reduce consumer demand,” said Sander van ’t Noordende, Group Chief Executive of Accenture’s Resources operating group. “But our survey shows that consumers do not think lower energy use is a priority.  It will take many years before renewable alternatives come fully on stream.  Until they do, governments and energy companies will have to find creative ways to transform consumer habits and improve energy efficiency.”
 

Sander van ’t Noordende summarizes the findings of the New Energy World survey in a video.

Consumers do not trust energy companies

• Only 22 percent of consumers surveyed unreservedly trust energy companies to take actions to address energy challenges.
• Almost a third (32 percent) do not trust them to do so and 46 percent trust them only if they have direction from governments.
• The highest levels of distrust are in the deregulated or partly deregulated markets of the UK (53 percent), US (51 percent) and Australia (46 percent).
• The lowest levels of distrust are found in the regulated energy markets of Japan (3 percent), India (8 percent), China (12 percent).

Consumers demand more government intervention

 

When asked who should lead on taking actions to address energy challenges, only 21 percent of the survey respondents said energy companies should. Almost half (45 percent) think governments and political leaders should take the lead, and 24 percent say consumers themselves should lead.
 

Almost all consumers (85 percent) think that more government control and intervention is required to address energy challenges. Asked to choose the most important government actions required:

1. 54 percent pointed to controlling energy prices
2. 51 percent to providing incentives for new technologies
3. 41 percent to making investment decisions regarding the development of sources of low-carbon energy.

“A return to command and control policies would not be good for consumers or energy companies,” said van ’t Noordende. “But unless policy makers can improve the performance of local energy markets, they may come under pressure to intervene in ways that limit consumer choice and restrict industry flexibility.”

 

Dislike of foreign energy companies

 

The Accenture survey also found that consumers prefer energy to be provided from domestically owned companies. Nearly three quarters (72 percent) are not comfortable with energy companies being owned by foreign owned companies. Sentiment against foreign ownership is strongest in the Netherlands (88 percent), followed by the United States and Italy (81 percent).  Consumers in Spain (60 percent), the Middle East (53 percent) and India (33 percent) are least worried by foreign ownership.

 

Methodology

Accenture’s study, The New Energy World, A Consumer Perspective, is based on an online survey conducted in native languages with 9,005 consumers in 22 countries worldwide, during November 2009. The sample included 1,500 people in North America, 3,502 in Western Europe, and at least 500 in each of Australia, Japan, China, India, South Korea, the Middle East, Brazil and Mexico. The sample was representative of the general population as a whole in terms of age, gender, and socio-economic except for emerging economies with low internet penetration where the sample is representative of the urban population.   The data collection was undertaken by Gfk NOP.