Future supply market arrangements – response to our call for evidence

Agendas, minutes and presentations, Correspondence and other

In November 2017, we published a call for evidence asking for views on whether regulatory arrangements that position suppliers as the primary interface between energy consumers and the energy system will need to change in light of the significant technological changes impacting the sector. In this context, we asked specific questions regarding barriers to innovation, default supply arrangements for consumers that do not engage in the market, and how to protect consumers regardless of how they access their energy supply.

We thank all of those who have taken the time to attend workshops, speak with us bilaterally and provide us with written responses. Based on extensive engagement and our review of the evidence we have concluded that current supplier hub arrangements are not going to be fit for purpose for energy consumers over the longer term. There is a strong case for considering fundamental reforms to the ‘supplier hub’ model, and for evaluating how alternative arrangements might operate in practice. This letter gives a summary of the evidence we’ve received. It also sets out what more we can do to ensure tomorrow’s retail market works for all consumers, and some immediate steps we will take to get there.

Alongside this letter, we have also published slides from a stakeholder workshop and research we commissioned regarding options for default supply arrangements and new ‘supplier’ business models in other retail energy markets (see below). For the avoidance of doubt, we note that this research does not necessarily reflect the views of Ofgem. It is evidence that we will scrutinise as part of our ongoing work on default arrangements. Consumer First Panel research relating to the future of the supply market has also been published on our website