Non-traditional business models: Supporting transformative change in the energy market

Publication date
25th February 2015
Closing date
20th May 2015
Policy areas
Status

Summary of responses to discussion paper

Earlier this year we published a discussion paper to ask for views on the transformative potential of non-traditional business models (NTBMs) and the potential challenges, risks and opportunities associated with their growth and development.

Today we are publishing a summary of the responses we received.

The non-confidential responses are available below and notes from our workshops are available on our workshop event page.

Many of you told us that NTBMs have the potential to transform the energy system, through increasing competitive pressure, unlocking more value for consumers, driving improved consumer engagement and enhancing system resilience. Many of you also said that NTBMs can deliver desirable consumer outcomes, in particular lowering bills, reducing environmental impact and improving services.

Many of the issues you raised are common to other work ongoing in Ofgem – in particular in the areas of flexibility, grid connections and the future of retail regulation.

Below we have set out the key issues that you raised with us and our timescale for future engagement with you.  

Key issues raised from transformative themes:

1. New models of flexibility in a changing energy system

You noted a number of challenges relating to the installation and use of generation, storage, and demand-side response. Ofgem is taking forward work on flexibility in a number of priority areas relating to these issues. Please see chapter 8 for more detail.

2. Local energy

Many NTBMs told us that the regulatory system should be reviewed so it can better accommodate local energy undertakings.

Key issues raised from cross-cutting themes:

1. Enabling diversity and innovation

Many of you told us that the current regulatory framework doesn’t offer the flexibility to develop their models and to demonstrate the impacts of their initiatives. You have asked for innovation space within the regulatory framework to trial your business model and demonstrate your impacts.

2.Consumer protection and service

Many of you told us that enabling the growth of NTBMs will have implications for consumers both positive and negative. You told us we should consider these risks and opportunities when developing options for regulatory change.

The vast majority of you said that regulation needs to become more flexible and agile. It needs to accommodate, respond to and enable energy system change. We already have a number of projects underway examining elements of this change. In light of your responses we are considering whether we should examine these issues in the wider context of our work on regulation and future energy system arrangements.

With this in mind, we are considering where our efforts are best focused next, and will publish a proposed course of action by the end of the year.

Response documents

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