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The Ofgem Group is made up of two Business Units: Ofgem and Ofgem E-Serve.
Ofgem, the industry regulator, promotes competition in the energy retail market and regulates the revenue and quality of service of the network companies that run the gas pipes and electricity wires. It builds foundations for sustainable development in the energy sector to shield the environment, secure supplies and protect the interests of vulnerable customers.
Ofgem E-Serve is the group’s delivery arm for environmental programme administration and sustainability projects such as offshore wind transmission, the proposed carbon capture and storage levy, and feed-in tariffs.
Ofgem’s work falls broadly into:
- Creating and sustaining competition
- Regulating networks effectively
- Helping to achieve sustainability
- Helping to protect the security of Britain's energy supplies
- Providing a leading voice in Europe
- Helping to tackle fuel poverty
- Keeping to Better regulation principles
Creating and sustaining competition
Ofgem ensures that wholesale and retail markets for gas and electricity are competitive. Competition keeps a rein on the prices paid by domestic consumers and businesses and encourages suppliers to offer innovative deals.
Ofgem monitors prices paid by customers for energy in the retail supply markets and produces regular reports on competition in the retail sector, covering customer switching and other indicators.
Regulating networks effectively
The costs of transporting gas and electricity make up about one fifth of a household customers' bills. The revenues of the companies running Britain’s networks - the gas pipes and electricity wires – are regulated by Ofgem. The regulator places incentives on the companies to ensure they are efficient and reliable and provide high-quality service to consumers.
New challenges to the companies and the regulator arise from growth in electricity generated by wind power and other renewable sources that need to connect to the networks and in infrastructure to adapt to Britain’s increasing reliance on imported gas.
Ofgem has created a new regulatory framework, known as the RIIO model (revenue = incentives+innovation+outputs). The RIIO model has been designed to promote smarter gas and electricity networks to meet the challenges of delivering a sustainable, low carbon energy sector.
Helping to achieve sustainability
Our principle objective, to protect the interests of consumers, refers to future as well as existing consumers. This underlines Ofgem's important and developing role in shaping the future of gas and electricity industries in a sustainable manner.
Ofgem's sustainable development work focuses on five themes:
- Managing the transistion to a low carbon economy
- Eradicating fuel poverty and protecting vulnerable customers
- Promoting energy saving
- Ensuring a secure and reliable gas and electricity supply
- Supporting improvement in all aspects of the environment
Helping to protect the security of Britain's energy supplies
As Britain approaches the end of its self-sufficiency in gas and its ageing power stations near the end of their lives Ofgem’s work to assure the future security of energy supplies is growing in profile.
Ofgem monitors the market rules and, with Government, provides timely information about future developments and trends. This allows industry to respond effectively to meet security of supply needs.
A leading voice in Europe
Increasingly Britain is becoming part of Europe's gas and electricity market and the competitiveness of the GB market depends greatly on what strides forward European countries can make in opening up their own markets to competition. Ofgem is a strong supporter of the European Commission's drive to liberalise European Union energy markets and members of Ofgem's markets team have been seconded to support the Commission's work.
Helping to tackle fuel poverty
Low incomes, poor housing stock and energy costs are the main causes of fuel poverty.
Ofgem’s core activities - promoting competition, regulating network revenues and driving sustainability go some way to protecting vulnerable consumers by containing price increases. Ofgem adds to this by encouraging best industry practice and raising awareness of what is available. Ofgem has guided the industry on tackling debt and disconnection as well as special tariffs and services for vulnerable customers.
Better regulation
Better Regulation principles call for transparent, accountable, proportionate and consistent regulation that is targeted only where it is needed. Ofgem keeps to these principles in all its operations and sets out the costs and benefits as well as the social and environmental impacts of everything it does.
More information under each of these themes can be found in the Corporate Plan.
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We may be relatively small (there are around 537 of us) but we know how to make a big impression and every contribution counts.
Together we have created a successful organisation that takes great pride in its work. We believe in and operate on the basis of four core values: transparency, professionalism, respect and integrity.
Learn more about Who’s who at Ofgem - PDF, 122KB - link opens in a new browser window.
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Ofgem has offices in London and Glasgow.
Our head office (where you will be based) is situated in central London on the banks of the River Thames between Westminster, St James’s Park and Pimlico underground stations. It is also near Victoria mainline station. View a printable map of our location - link opens in a new browser window.
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If you would like further information about Ofgem’s Graduate Development Programme, please email us at graduates@ofgem.gov.uk.