Ofgem unveils reforms to strengthen consumer protection and clean power ambitions

The announced reforms strengthen the regulator and expand its powers over the energy market to push for greater investment and clean power.

Image: Carers Matter Norfolk

The UK government has announced reforms to the energy regulator, Ofgem, designed to strengthen consumer protections.

The Department of Energy Security and Net Zero (DESNZ) said the “comprehensive overhaul” will give Ofgem stronger powers to directly enforce consumer law, the ability to regulate “new areas of the market” and to ban energy executive bonuses if they “break the rules”.

In essence, the announced reforms strengthen the regulator and expand its powers over the energy market, the first “major update” to its operations since it was founded in 2000, DESNZ said.

In practical terms, Ofgem will forego its oversight of home upgrades schemes (for rooftop solar, energy storage or heat pumps) in order to “focus on its core functions as an economic and consumer protection regulator.”

The regulator will also have its technical expertise and use of data improved, as well as reforms to its “approach to risk…enabling the regulator to take faster decisions in the interests of consumers.”

The government said the changes would allow Ofgem to “drive forward clean power and economic growth” to increase innovation, investment and modernisation in the UK’s energy system.

Tim Jarvis

Interim Ofgem CEO, Tim Jarvis, said: “Great Britain’s energy system is going through the biggest changes in our lifetimes, and the regulator needs to be able to keep pace with that change.

This review sets out ambitious, necessary reforms that will enable Ofgem to meet the challenges of regulating an increasingly electrified and flexible energy system and protect consumers so they can engage confidently in markets offering new products and services.”

He continued: “This review enables us to make changes at a more systemic level to ensure we are delivering an energy system that works for consumers, that is attractive to investors, and provides a stable, reliable environment for participants in the industry.”

Laura Sandys

Laura Sandys CBE, chair of the Energy Network Innovation Taskforce and Green Alliance, welcomed the reforms, saying they streamlined Ofgem’s role “to become a truly modern regulator, moving from technology-based regulation to a consumer-centric model and being responsible for driving growth.”