Ofgem has set out its key objectives and priorities to help carry out its principal duty to “protect the interests of existing and future consumers” in a rapidly changing energy sector. A major transformation is underway in the way energy is generated, used and purchased as the UK makes the transition to a low carbon, smarter and decentralised system.
The strategic narrative covers the period until 2023 when the price cap on default tariffs is due to expire and all networks are subject to RIIO2, Ofgem’s next price control. The strategy document sets out Ofgem’s three key objectives to guide its approach over this period. This includes a key objective to help decarbonise the economy at the lowest cost to consumers after Parliament passed legislation last month enshrining in law the target of net zero carbon emissions for the UK by 2050.
Consumers and stakeholders should expect Ofgem to:
- Enable competition and innovation which drive down prices and result in new products and services
- Protect consumers, especially the vulnerable, stamping out sharp practice and ensuring fair treatment
- Decarbonise to deliver a net zero economy at the lowest costs to consumers
Martin Cave, the chair of Ofgem, said: “We are witnessing exciting and rapid changes in the energy system while the way consumers interact with the energy market is changing too. The strategic narrative will guide stakeholders on Ofgem’s planned approach to the coming opportunities and challenges over the next four years to ensure that consumer interests remain protected today and tomorrow.”
“Ofgem, working with Government and stakeholders, is determined to help decarbonise energy use at the lowest cost to consumers, to unlock the benefits of competition and innovation and will ensure no consumers, especially the vulnerable, are left behind.”
Ofgem says its also committed to developing a more efficient, agile way of working to allow the regulator to respond more quickly and effectively to the fast changing energy sector.
Peter Earl, Head of Energy at comparethemarket.com, said “The energy sector is changing rapidly for all involved, including consumers, coping with increased competition, responding to advances in technology, and recognising the importance of decarbonisation. It is imperative that regulation is implemented effectively around all of these changes to deliver good outcomes for every consumer.”
“The current default price cap is only a sticking plaster and will not repair the fundamental failings within the energy market. The best way to drive down prices is to increase competition through regular switching. It is vital that Ofgem makes it very clear that the price cap is a temporary solution and that people will still most likely get the best deals by shopping around and switching away from a standard variable or default tariff.”