Ofgem enforcement action leads to £150m funding for vulnerable energy consumers
Press release
- Dyddiad cyhoeddi
- Sector diwydiant
- Supply and Retail Market
Millions of pounds of fuel vouchers and advice on how to save energy to bring down bills are just some of the measures funded by £150million recovered by the energy regulator Ofgem from firms that break the rules.
Since its inception in 2018, the Energy Redress Scheme has been funded by money paid to Ofgem by energy companies who have breached regulations. The funds, which are then paid out as grants, have supported 647 projects which support vulnerable consumers, provide energy advice, and back the development of innovative products and services fast tracking our journey to net zero.
Licence breaches can range from incorrect billing and poor customer service and complaint handling by energy suppliers, to abuse of wholesale energy markets by generators.
Recent Ofgem compliance action on OVO Energy, for example, resulted in a payment from the company of £2million to the scheme for failings in how the supplier handled customer complaints. A separate investigation last year into Beatrice Offshore Windfarm Limited also resulted in a redress payment of £33.14million for breaching energy market rules.
The nature of support provided to date varies widely but includes:
- more than £55 million allocated to Fuel Voucher projects providing help to vulnerable customers at risk of disconnection from their energy supply
- providing energy advice to more than 700,000 households, with more than 200,000 small energy efficiency measures such as LED bulbs and draught-proofing to 72,000 households and referrals for energy efficiency measures such as insulation and heating upgrades to more than 16,000 households
- working to ensure that future home heating controls and new energy technologies work for everyone including people living with disabilities
Cathryn Scott, Director for Market Oversight and Enforcement at Ofgem, said: “Protecting customers and ensuring they’re treated fairly is at the heart of Ofgem’s mission. That’s why we make sure that when energy companies break the rules, they make amends by contributing to projects that make our energy system fairer and support those in need.
“£152 million is a huge sum of money and has helped thousands of people all over the country struggling with bills, as well as contributing to projects that help people decarbonise and learn more about their energy consumption.
“Ofgem’s enforcement function is a powerful weapon in our regulatory arsenal, evidenced by the more than £92mn in compensation to customers, redress payments and fines successfully handed out in 2024 alone.
“The latest milestone of securing £150mn in redress payments for good causes could not have happened without the thorough investigative work of our compliance and enforcement teams or the Energy Saving Trust who ensure the money is targeted to reach those in need.”
Graham Ayling, Senior Project Manager for the Energy Redress Scheme, said: "Through the last six years of unprecedented challenges, this funding has enabled voluntary sector organisations at the heart of their communities, to deliver vital support to those most at risk from high energy prices.
“In addition to this, the scheme has also been able to fund projects that focused on building a net zero society that leaves no one behind.”
Jo Muntus, Energyworks Manager at Citizens Advice Brighton & Hove, said: “We’re really proud to offer this service to Brighton and Hove residents - supporting clients to keep warm, save on their bills and manage their energy better.
“Our team are the experts with all things energy and have supported behavioural change through energy advice and reduced clients bills through our energy company advocacy.
“Our partnership with Brighton and Hove energy services co-op has provided 300 home visits, providing face to face support to clients, helping reduce damp and associated health risks, and supporting clients to feel warmer.
“We want to continue this work by engaging landlords to invest in their rental properties so Brighton and Hove residents can spend less on their energy, be safer and more comfortable for the longer term.”
A recently funded project is the Citizens Advice Energyworks project in Brighton and Hove, which was awarded nearly £528,000 to help all city residents in fuel poverty with free and impartial energy advice.
As part of the project, frontline workers in the public sector will be trained to recognise the signs and impacts of fuel poverty. Local tenants, landlords and agents will also receive advice on how best to improve energy efficiency and reduce damp and mould in their homes. It will also connect residents in need of extra support to energy related grants.
At the end of last year, research showed that more than 16,000 households in Brighton and Hove were living in fuel poverty, so projects like this are vital.1 To date, the energy redress scheme has supported more than 3,000 Brighton and Hove residents and will soon help many more with this additional round of funding.
These significant levels of redress funding and regulatory fines are a result of Ofgem’s mission to protect consumers from unfair costs and drive-up standards throughout the energy industry. The regulator’s proactive work to identify issues is a reminder to energy suppliers that there are consequences of not following the rules and looking after customers.
Notes to editors
For further information, contact press@ofgem.gov.uk
About the Energy Redress Scheme
Ofgem collects voluntary payments from companies that may have breached Ofgem administered rules. Energy Saving Trust manages the allocation of payments for the scheme, which has been in place for six years.
Registered Charities, Community Interest Companies, Co-operative and Community Benefit Societies can apply for funds through four funding streams, to deliver energy related projects that meet the scheme priorities.
The scheme prioritises support for vulnerable energy consumers, the development of innovative products or services and the empowerment of consumers to reduce their carbon emissions.
Since 2018, the Energy Redress Scheme has funded more than 647 projects across England, Scotland and Wales and awarded over £152 million in funding.
The projects have included:
- impartial energy advice services supporting vulnerable people
- digital media to engage hard-to-reach audiences with energy issues and the support that is available to them
- research projects aimed at making sure that the needs of elderly people and disabled people are met by new energy technologies
- boosting the uptake of whole-house retrofits
- trialling new business models or interventions to allow households to use more locally generated energy
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