Ofgem: Innovation and regulation

Publication date
7th December 2016
Information types
Policy areas

We’re standing at the edge of a deep and wide-ranging transformation in the energy system. Moving from a largely centralised, carbon-intensive model to one which will be increasingly carbon-constrained, smart, flexible and decentralised is creating challenges which can only be addressed by innovation. Innovation’s role in this transformation likely means that the energy system of tomorrow will be as unfamiliar to us as today’s information technologies would be to the early internet pioneers.

We believe that innovation in technologies, processes, products and services should be able to reach all parts of the energy system. Innovative business models developed by new entrants and incumbents are already blurring the traditional energy sector roles of suppliers, generators, distributors and consumers. They’re challenging current market structures and how the energy system is configured and operated.

This report responds to the questions raised by the government in its Productivity Plan (2015) about the roles of new technologies and business models in driving innovation in the energy sector, and the implications for regulatory arrangements. This isn’t a consultation, but a source of information for stakeholders summarising the work we’re doing to promote and facilitate innovation to deliver better consumer outcomes. Links to further information about our work is provided throughout the report.