Our response to the Ofgem review
Blog
- Jonathan Brearley
- Chief Executive
- Publication date
- Industry sector
- Carbon capture and storage
- Distribution Network
- Generation and Wholesale Market
- Offshore Transmission Network
- Supply and Retail Market
- Transmission Network
Today, 19 December 2024, the Department for Energy Security and Net Zero (DESNZ) announced a comprehensive review of Ofgem’s remit, powers and capabilities to champion the interests of consumers, supporting the journey to Net Zero and promote wider economic growth. In my view, this is great news. A lot has changed across the energy market since our remit was set 25 years ago.
The gas crisis exposed us to unprecedented risks that fundamentally changed our energy market. Every couple of weeks or so, I phone a customer to hear about their experiences, and I know that the cost of energy continues to be a big issue for many households.
Since the gas crisis began, we have acted against long call waiting times, toughened up requirements on suppliers to identify and support vulnerable customers, and sought to drive up standards by being clear about the outcomes we are seeking and the incentives we need to put in place. We also recently set out our ideas to give customers more choice about how they pay for their energy and better support for those struggling with debt.
However, while customer satisfaction has risen, we are not yet seeing the high standards for all energy consumers that we expect. Equally, as we move to new ways of generating and using energy, we will need to continue adapting our approach, making the case for change and doing everything we can to ensure Ofgem is set up in the right way to champion the interests of consumers in the future.
We now want to explore what further changes Ofgem could make with new powers and a wider remit. For example, we are interested in the approach of the Financial Conduct Authority, which has a broad range of powers, such as a consumer duty, and the ability to hold executives more strongly to account.
But this isn’t all about black-and-white regulation. It is also a challenge for the whole sector and one that won’t be met overnight. We need to think about the diverse needs of all our customers, changing the culture of the energy sector, and do things differently.
This review is a great opportunity to help make sure Ofgem is a fully consumer-focused champion with the powers needed to protect customers, drive up standards in the market today, and empower the market to innovate and produce renewable energy for a low carbon future tomorrow.
I have spoken to the Energy Secretary Ed Miliband and the Minister for Energy Consumers Miatta Fahnbulleh, and I know they are both deeply committed to protecting vulnerable consumers and delivering on their 2030 clean power mission. We will continue to work closely with them, as well as across government, the industry and consumer groups, to ensure Ofgem is fully equipped to enhance standards, protect consumers in a changing energy landscape and support the government’s ambitious energy goals.
Wherever you are across the energy sector, I hope that you can engage effectively with the consultation when it comes out later this year. We will also be hosting key stakeholder events to work with you in the coming months, so please look out for these.
Working together, we can ensure consumers’ needs are put first as we face both the challenges and opportunities of the transition to a low carbon future.