Ofgem’s response to Labour and Which? on its reforms to make competition work better for consumers
Press release
Publication date
Industry sector
Supply and Retail Market
A spokesperson for Ofgem said:
“For the Labour Party and Which? to dismiss Ofgem’s fundamental reforms is to misunderstand the barriers to competition that we have identified and are tackling. In fact Ofgem’s reforms go further than Labour’s proposals for increasing liquidity, which they refer to as a pool. Labour’s proposals only relate to the short-term market, where the big six are already auctioning large volumes of power after pressure from Ofgem.
“Independent suppliers have told us that it is difficult to buy power in the forward markets so they can hedge their position in the same way the Big Six can. That is why Ofgem is requiring the Big Six to publish the price at which they will trade wholesale power up to two years in advance and to sign-up to rules meaning they must trade fairly with independent suppliers or face fines. This will give independent suppliers the access they need to power on the forward markets so they can compete more effectively.
“This is just one part of Ofgem’s sweeping and comprehensive reforms to the energy market to make sure competition bears down as hard as possible on prices. Consumers are already seeing the benefit of our reforms to make the market simpler, clearer and fairer. Ofgem is also currently reviewing the market with the CMA and OFT to see if more needs to be done to protect consumers.”
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Notes to editors
1. Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem