Labour have decided to review the role of Ofgem.
DESNZ says this is to ensure it can meet the challenges of a rapidly evolving energy market and the net zero transition.
Ofgem was set up in 2000 and in a paper announcing the review, the Department says it now faces significant changes in the energy sector, including new technologies, companies and the increasing importance of energy in daily life.
The energy crisis and supplier failures have eroded consumer trust, which must be restored to achieve net zero goals effectively.
The Government’s Call for Evidence seeks input on reforming Ofgem, to regulate a dynamic market while protecting consumers and promoting growth.
It will explore how the regulator can adapt to oversee the shift to cleaner energy sources, ensure fairness, and drive economic and energy security benefits.
Here are some of the areas the review will explore..
Mandate
The first area is the existence of the organisation itself and what mandate it should have in this changing energy system
We are seeking views on whether Ofgem’s duties should be streamlined and if they
should, views on which goals might be prioritised.
Cleaner tech
Clean tech
The next area is how it will oversee the growth of low carbon technology.
We are seeking views on Ofgem’s remit in enforcing consumer law in respect of low
carbon technologies, such as heat pumps and solar panels and what the appropriate
boundaries might be.
Clean Grid
Another major area is how the regulator will work with the newly nationalised grid system.
We are seeking views on Ofgem’s role in an energy system that is now, in part, driven
by strategic planning following the creation of NESO, in particular, how should
regulatory strategy be aligned with strategic energy plans.
The full list of areas of review can be found here.
This marks the first step, says Labour, in reshaping Ofgem to create a future-ready regulator that supports sustainable progress towards net zero while safeguarding consumer interests.
The consultation will close in February.
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