What’s in store for the future retail energy market?
Blog
Adhir Ramdarshan
Publication date
Industry sector
Supply and Retail Market
Here at Ofgem we’re working on reforms that will improve the energy market for consumers.
We published our first consultation on how we intend to regulate the market, and while we’re busy reviewing your responses and the energy retail supply licences, we hope more of you will share your ideas with us. Make sure you respond to our future of retail market regulation consultation by 11 March if you have something you want to tell us.
As the market changes, we need to re-think the way we regulate it. Simply adding more detailed rules isn’t always the answer. In future, we see us regulating through rules geared towards better results for consumers, rather than making companies follow exclusively prescriptive ones to the letter.
Personally, I think regulation must evolve with the market to ensure consumers can benefit from the innovation and the technological changes happening.
Moving away from tick-box regulation
I’m confident that moving in this direction will unlock benefits for consumers.
It will deliver better, stronger protections for them, particularly those who struggle to navigate the energy market. By forcing suppliers to move away from a box-ticking approach to complying with rules, they’ll think harder about how to best meet consumers’ needs.
The onus will be on them to put consumers at the heart of their businesses. Those who fail will face tough action.
But that’s not the only reason we’re doing this. Moving to more principles and less prescriptive rules in suppliers’ licences will help newcomers to the market, and will give suppliers the space to innovate more.
Monitoring a new principles-based framework
One of the things we’re also thinking hard about is how we can better monitor our new principle-based framework. Engaging with Citizens Advice and the Ombudsman, not least in sharing data, will be vital.
Relying more on principles will mean wider changes for us as an organisation too, and getting this right is a major focus for us. Our experience to date with the Standards of Conduct has been really helpful here. This includes looking at how we should engage with suppliers so they receive enough direction and support, while moving away from a heavy reliance on guidance that sits outside our rulebook.
Engagement and compliance is already a big focus, and this will continue. We’ve also made significant strides over the last year to get out more and meet suppliers on their turf to better understand their businesses.
We want to hear your thoughts on this, so please get in touch. I look forward to reading submissions on 11 March, and continuing this important conversation.