Our aim is to make a positive difference for energy consumers, and our principal duty is to ‘protect the interests of existing and future consumers’. This informs our whole approach to regulation in Great Britain and the way that we work with stakeholders. It obliges us to evaluate almost any situation or proposed change through the lens of energy consumers.
Consumers are of all types, including: households, micro-businesses, SMEs, public sector and voluntary bodies, and industrial and commercial companies. All of these consumers are affected by what happens across the energy value chain.
Our strategic narrative sets out our priorities and objectives. It covers the period to the end of 2023, when all networks are subject to the next price controls (‘RIIO-2’), and the government’s recently installed default tariff price cap is due to end. It also includes the period of the government’s next Spending Review.
In delivering this strategy, consumers and stakeholders can expect us to:
- facilitate decarbonisation efforts to deliver a net zero economy at the lowest cost to consumers.
- protect consumers, especially the vulnerable, by stamping out sharp practice and ensuring fair treatment.
- enable competition and innovation, which drive down prices and result in new products and services.
We also deliver many of the government’s environmental and social support programmes to ensure we maximise value for money for consumers. These programmes are key to enabling low-carbon heat and power, and cover fields as diverse as renewable heat and electricity, energy efficiency and fuel poverty.
Given the pace of change in the energy industry we expect to periodically revise our strategy. We will continue to publish and consult on our Forward Work Programme each year, as this provides the overall context for our priorities.
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 overall 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 to introduce is proportionate and necessary to protect consumers.
Key to how we work is our responsibility, subject to our Enforcement Guidelines, to 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 Investigations.
In our Annual Reports we explain our progress in protecting consumers and delivering the priorities of our strategy.
At the forefront of public interest are questions about how energy is produced and supplied, its affordability, sustainability and environmental impact. As Britain’s independent energy regulator, we are uniquely positioned to provide an impartial and robust picture of the sector.
Alongside regular statistics on market performance on the Ofgem Data Portal, we produce annual reports on the State of the Energy Markets and the Consumer Impact of our policies. Jointly, these aim to provide current and clear analysis covering retail and wholesale energy markets, and the energy networks.