Ofgem’s Future Insights paper 3 - Local energy in a transforming energy system

Publication date
30th January 2017
Information types
Policy areas

In Spring 2016, Ofgem instigated the Insights for Future Regulation (IFR) project to help us determine how, in the face of significant uncertainty, we can best perform our primary duty to protect the interests of current and future consumers.

Over the summer we worked with stakeholders to explore a focal question: “What are the drivers of energy system and market change that have the most material impacts on consumers and implications for regulation?”

This paper is the third in our series of ”Future Insights” publications and considers the current local energy landscape, the types of business models that are emerging and the implications for consumers and regulation.

We conclude that the emergence of local energy is a welcome development and one that is likely to increase consumer engagement and choice. We recognise that local schemes need proportionate treatment and that regulatory arrangements should enable the emergence of business models that are in the long-run interests of consumers. But that should not be at the expense of customers who aren’t included in a local scheme, and will need to provide appropriate protection (such as opportunities to switch) if service standards and value aren’t maintained to the satisfaction of those customers.

The views expressed in this paper do not represent established Ofgem or Gas and Electricity Market Authority positions.