Smarter Markets Programme

By the end of the decade, the government wants all consumers to have smart energy meters. These can bring great benefits to consumers by helping them to better manage their energy. They’ll also do away with estimated bills by recording your exact usage and sending it directly to your supplier. 

Together with changes to industry processes, smart meters open the door to far greater customer involvement in the energy market. Through this, we will have a more dynamic and competitive market. This paves the way towards more efficient energy use, and the offer of more innovative tariffs and services to consumers.

How will we get to a smarter market?

Ofgem is leading work over the next few years to make sure the smarter market becomes a reality. Our projects include:

Switching Programme: Fast, reliable switching

We are leading work to improve the change of supplier processes to deliver fast, reliable switching for consumers. 

Electricity settlement arrangements

Settlement arrangements work out how much consumers use in each half hour of the day and how much suppliers pay for that electricity. Currently, most consumers’ half-hourly consumption is estimated. As smart meters can record actual half-hourly consumption, this data can be used in settlement. This would encourage suppliers to offer tariffs that cut charges for consumers that use electricity when it is cheaper.

We’ve recently approved an industry proposal to settle larger businesses using their half-hourly consumption data and have been looking at how the same can be achieved for smaller businesses and households.

Demand-side flexibility

We’re looking at the benefits of changes to settlement arrangements in the context of our project on demand-side flexibility. Flexibility encompasses aspects such as energy storage and interconnection as well as demand-side response. We are developing a strategy to enable and enhance the efficient provision and use of flexibility sources across the supply chain.

Consumer empowerment and protection

We’re working to ensure that all consumers, particularly vulnerable consumers, are properly protected in a smarter market. 

Retail market review  

We’ve introduced reforms to make the retail market simpler, clearer and fairer for consumers. We also referred the energy market to the Competition and Markets Authority (CMA) for investigation last year. We will continue to evaluate progress of our reforms while the CMA review is ongoing. 

Updates on our progress

For regular updates across all of our work to promote smarter markets, subscribe to our newsletter.

Need help?

For questions about the programme or the content of this page, please contact us.

Publications and updates

  • Published: 18th Apr 2016
  • Open letters and correspondence
  • 2 Associated documents
Open letter setting out the new governance arrangements for Project Nexus.

  • Published: 18th May 2015
  • Open letters and correspondence
  • 1 Associated documents
This letter sets out our response to the independent project and assurance manager’s report on industry readiness for implementing Project Nexus on 1 October.

  • Published: 30th Mar 2015
  • Factsheets
  • 0 Associated documents
An interactive guide to our vision for a smarter energy market for consumers.

  • Published: 30th Mar 2015
  • Factsheets
  • 0 Associated documents
An interactive guide to our vision for a smarter energy market for consumers.

  • Published: 30th Mar 2015
  • Factsheets
  • 0 Associated documents
An interactive guide to our vision for a smarter energy market for consumers.

  • Published: 30th Mar 2015
  • Factsheets
  • 0 Associated documents
An interactive guide to our vision for a smarter energy market for consumers.

  • Published: 30th May 2014
  • Open letters and correspondence
  • 1 Associated documents
The purpose of this letter is to update parties on our current thinking on the operation of the Annual Quantity (AQ) process and to give advanced notice that we will shortly be issuing a Request for Information (RFI) to gas shippers on the AQ review...

  • Published: 6th Feb 2014
  • Open letters and correspondence
  • 1 Associated documents
This letter sets out Ofgem’s expectations on industry to help create the market conditions necessary to support the realisation of the benefits of smart metering.

  • Published: 31st Jul 2012
  • Open letters and correspondence
  • 1 Associated documents
This letter sets out Ofgem’s expectations for gas settlement reform and invites the Gas Distribution Networks to provide further information, in the form of detailed plans, to provide assurance that reform will be delivered and expectations will be met.

  • Published: 31st Jul 2012
  • Decisions
  • 35 Associated documents
This document sets out the initial scope of a work programme to shape market development from the platform of smart metering.

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