Ofgem to ensure consumers are protected in a rapidly changing energy market
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Supply and Retail Market
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Ofgem has today published its Forward Work Programme consultation, which sets out its plans to make the energy market work better for consumers over the next financial year.
A set of reforms are being developed which will help improve competition and consumer trust in the energy market, starting with a price cap to protect pre-payment meter customers in April which will save them up to £75 a year. This results from the Competition and Markets Authority’s remedies for the energy market.
Making it easier for consumers to get a better deal in the market will be a key area of work. Ofgem will be carrying out extensive trials to find the most effective ways to help consumers shop around for better deals.
Ofgem will also set out its plan for bringing in faster, more reliable switching, and will reach a decision on it by the end of the year. Faster switching will help ensure consumers get the most out of smart meters.
Dermot Nolan, Ofgem Chief Executive, said: “Over the next year we will take big steps towards delivering a better energy market for consumers.
“Many changes will be brought in as we head towards a smarter market which should revolutionise energy, giving consumers much more control. Helping consumers to get a better deal and bringing in faster, hassle free switching are also priorities for us.
“However, the key to a better energy market is trust. Ofgem will play its part by clearly explaining how the market works and building more confidence in the switching process. But energy suppliers also need to step up to the plate and work with us and consumer groups to create an energy market which works for everybody, not just those who frequently switch to get the best deals .”
Key programmes over the next financial year include:
- Preparation for the next Revenue=Incentives+Innovation+Outputs (RIIO) price controls for gas and electricity transmission, and gas distribution (from 2021). We are looking at what is working well and what should be improved for the next price control. This will ensure customers continue to benefit from high reliability standards and customer service.
- Continuing to put the onus on suppliers to treat their customers fairly, with special consideration for vulnerable consumers. We will do this by introducing more principles-based regulation for suppliers.
- Expanding competition within the UK’s energy network, Ofgem is working to introduce tendering for high value onshore transmission upgrades from next year to drive down costs for consumers.
- Work with the government and industry to make the energy system more flexible. Having a more flexible system could save consumers between £17-40 billion by 2050.
Notes to editors
For more information on the RIIO Price controls, please refer to our website.
About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.
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