Our role and responsibilities

Who we are

Ofgem is Great Britain’s independent energy regulator.

We work to protect energy consumers, especially vulnerable people, by ensuring they are treated fairly and benefit from a cleaner, greener environment.

We are responsible for:

  • working with government, industry and consumer groups to deliver a net-zero economy, at the lowest cost to consumers
  • stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable
  • enabling competition and innovation, which drives down prices and results in new products and services for consumers.

Our powers and approach to regulation

We operate in a statutory framework set by Parliament. This establishes our duties and gives us powers to achieve our objectives.

The government is responsible for setting the policy for the energy sector and proposing any changes to this statutory framework. We have a clear role to play to support policy issues such as decarbonisation and we need to operate within this framework. We do not direct overall policy in the sector. However, where we think there are important policy gaps that affect consumers, we can call this out.

We continually seek to improve the efficiency and effectiveness of our approach. This includes setting out the costs and benefits, as well as the social and environmental impacts, of all major decisions.

We regulate only where necessary to protect consumers’ interests and we carefully consider whether any regulatory requirement we propose is proportionate. We carry out investigations into company behaviour when we believe they may have breached a condition of their licence, or the requirements of consumer protection, or competition legislation.

We have the power to require disclosure of information, and to impose fines and enforcement orders on companies where we find that a breach has occurred (apart from breaches of consumer law where penalties cannot be imposed).

You can read details of our closed and current investigations, and of enforcement actions we have taken, in our section on Compliance and enforcement. 

How we are governed and funded

We are governed by the Gas and Electricity Markets Authority (GEMA). This consists of non-executive and executive members and a non-executive chair.

GEMA determines strategy, sets policy priorities and makes decisions on a wide range of regulatory matters, including price controls and enforcement. GEMA’s powers are provided for under the following:

  • Gas Act 1986
  • Electricity Act 1989
  • Utilities Act 2000
  • Competition Act 1998
  • Enterprise Act 2002
  • measures set out in a number of Energy Acts.

You can see more information about GEMA, our senior executive leadership and our organisational structure in Our structure and leadership.  

How we are funded

We recover our costs from the licensed companies we regulate. Licensees must pay an annual licence fee, which is set to cover our costs. We are wholly independent of the companies we regulate. 

Working with other regulators

UKRN Members

The UK Regulators’ Network (UKRN) launched on 19 March 2014. It brings together the heads of the various regulators, usually the Chair or Chief Executive, to discuss issues of mutual concern and to report on recent developments in their own particular sector.

The three main objectives of the new network are to improve the consistency of economic regulation across sectors, deliver efficiency of regulation and to improve understanding of how independent economic regulation works in the interests of consumers, markets, investment and economic performance.

The UKRN is a network formed by 13 of the UK’s sectoral regulators, including Ofgem. You can view a list of the members, and find out more about the work of the network on the UKRN website.