Part of Ofgem's role is to ensure that Britain's energy wholesale and supply markets are competitive.
The wholesale markets are where energy suppliers purchase gas and electricity for their customers. More than half of domestic bills and a quarter of business customers’ bills are made up of wholesale energy costs.
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.
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.
Technology is also an increasingly important influence on how energy markets operate. For example, the Government policy to roll out smart metering to all homes in Great Britain and to many business and public sector users will create many opportunities and challenges for market development. Ofgem’s markets team is responsible for ensuring that regulation protects and promotes the interests of consumers through the process of market development.