Full competition was introduced into Britain’s retail energy markets in the late 1990s. Since then, domestic and non-domestic consumers have been able to shop around for their gas and electricity supplier.
Suppliers buy energy from the wholesale market or directly from a gas producer or electricity generator and arrange for it to be delivered to the end consumer. They set the prices that consumers pay for the energy that they use. Allowing consumers to choose their supplier helps to keep pressure on prices and drives better customer service. It also promotes innovation in products and services.
Our role is to make sure that retail energy markets work in the interests of consumers. We do this by monitoring the market and, where necessary, taking action to strengthen competition or enforce the rules with which suppliers must comply.
Over the coming decade, the roll-out of smart meters to homes and businesses has the potential to transform how the retail market operates to the benefit of consumers. These meters will be capable of measuring the amount of energy used in short time periods. They will also be capable of remote two-way communications.
We are responsible for ensuring that regulation protects and promotes the interests of consumers during the transition to smart metering and beyond.