Policy Threads

11 Feb 2026 | Committee report linked

Small business energy customers engage with the energy market more like individual consumers than companies. Despite this, they have access to none of the same protections, leaving them vulnerable to opaque bills, contracts, and a limited number of energy providers. (Conclusion, Paragraph 138)

Small business energy customers engage with the energy market more like individual consumers than companies. Despite this, they have access to none of the same protections, leaving them vulnerable to opaque bills, contracts, and a limited number of energy providers. …

▤ View document · ↗ GOV.UK

1 Nov 2023 | Committee report linked

Ofgem’s failure to ensure that energy suppliers were financially resilient resulted in costs to energy consumers and taxpayers when these energy companies failed. To encourage new suppliers into the market and encourage price competition and innovation, Ofgem took a ‘low bar’ approach to licencing new retail energy suppliers. Between 2010 and May 2022, at least 73 new energy suppliers entered the market. However, over the same period, at least 65 suppliers exited the market. Between July 2021...

Ofgem’s failure to ensure that energy suppliers were financially resilient resulted in costs to energy consumers and taxpayers when these energy companies failed. To encourage new suppliers into the market and encourage price competition and innovation, Ofgem took a ‘low …

▤ View document · ↗ GOV.UK

1 Nov 2023 | Committee report linked

In October 2022, Ofgem reviewed the proposed sale deal to assess whether Octopus had suitable financial and operational capabilities to ensure consumers’ interests were protected. As part of its review, Ofgem concluded that there was a risk that Octopus’s systems and processes were not robust enough to handle the scale of new customers. It also identified risks around Octopus’s low levels of investor support and rapid growth which had meant that it had a weaker financial position compared wit...

In October 2022, Ofgem reviewed the proposed sale deal to assess whether Octopus had suitable financial and operational capabilities to ensure consumers’ interests were protected. As part of its review, Ofgem concluded that there was a risk that Octopus’s systems …

▤ View document · ↗ GOV.UK

1 Nov 2023 | Committee report linked

The government has an obligation to ensure continuity of energy supply to customers in the event of an energy supplier failure. We asked Ofgem what it had learned from recent supplier failures and whether it had reviewed the mechanisms in place for protecting energy customers. Ofgem told us that it kept the default process, the SoLR, under regular review and that the primary issue it saw with the process was the delay in transferring customers from the failed supplier to the new supplier. It ...

The government has an obligation to ensure continuity of energy supply to customers in the event of an energy supplier failure. We asked Ofgem what it had learned from recent supplier failures and whether it had reviewed the mechanisms in …

▤ View document · ↗ GOV.UK

1 Nov 2023 | Committee report linked

Octopus was the only bidder for Bulb energy during the sale process. Ofgem told us that this was in part due the unhedged position of Bulb, meaning it did not have any contractual arrangements with a wholesale energy supplier to purchase energy in advance. It explained that the lack of hedging, combined with the volatile high energy prices, made Bulb unattractive to bidders especially since some suppliers were experiencing difficulties in accessing appropriate long-term arrangements to develo...

Octopus was the only bidder for Bulb energy during the sale process. Ofgem told us that this was in part due the unhedged position of Bulb, meaning it did not have any contractual arrangements with a wholesale energy supplier to …

▤ View document · ↗ GOV.UK

20 Oct 2023 | Committee report linked

The Department and Ofgem are also in the process of introducing reforms to the energy retail market, in part to increase resilience and enable innovation. This reform comes at a time when new and innovative technologies are being developed, including those that contribute to or encourage consumer behaviour change in line with net zero.52 The Department highlighted that some innovative energy suppliers were able to offer tariffs, to consumers with smart meters, that could save up to two-thirds...

The Department and Ofgem are also in the process of introducing reforms to the energy retail market, in part to increase resilience and enable innovation. This reform comes at a time when new and innovative technologies are being developed, including …

▤ View document · ↗ GOV.UK

21 Jun 2023 | Committee report linked

The Department is also currently considering fundamental market reform of how electricity is bought and sold, through which it hopes to reduce costs of electricity to consumers over the long term. The Department expects reform of the retail market to result in more scope for suppliers to offer flexible tariffs, for their customers to benefit from cheaper electricity when demand is lower.60 Reducing electricity demand through energy efficiency and consumer behaviour

The Department is also currently considering fundamental market reform of how electricity is bought and sold, through which it hopes to reduce costs of electricity to consumers over the long term. The Department expects reform of the retail market to …

▤ View document · ↗ GOV.UK

16 Jun 2023 | Committee report linked

The Department does not yet know how its plans for winter 2023–24, or once support ends in April 2024, will impact households, or how it will ensure the energy retail market provides a fair deal for consumers. At the time of our evidence session, the Department’s plans for winter 2023–24 meant household energy bills are expected to increase by £775 in 2023–24 if energy prices remain high. The government has committed to consulting on amending the EPG as soon as is feasible after April 2023 so...

The Department does not yet know how its plans for winter 2023–24, or once support ends in April 2024, will impact households, or how it will ensure the energy retail market provides a fair deal for consumers. At the time …

▤ View document · ↗ GOV.UK

28 Apr 2023 | Committee report linked

There has been a clear lack of strategic planning and coordination of energy infrastructure and network upgrades. A failure to plan from a whole system perspective risks increasing the overall costs of the transition. We welcome the more strategic approach emerging following National Grid ESO’s Holistic Network Design and Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework. We also welcome measures included in the Energy Bill to enable competition in onshore electricity net...

There has been a clear lack of strategic planning and coordination of energy infrastructure and network upgrades. A failure to plan from a whole system perspective risks increasing the overall costs of the transition. We welcome the more strategic approach …

▤ View document · ↗ GOV.UK

28 Apr 2023 | Committee report linked

The current regulatory and market structures of the retail sector will not deliver a consumer experience that can adequately support the transition to decarbonised power system. We recommend that the Government prioritises the reform of the retail market and that its updated Energy Retail Market Strategy: a) clearly sets out the role that suppliers will be expected to play in the transition to a decarbonised power system as well as interim milestones to achieve this; b) enables suppliers to i...

The current regulatory and market structures of the retail sector will not deliver a consumer experience that can adequately support the transition to decarbonised power system. We recommend that the Government prioritises the reform of the retail market and that …

▤ View document · ↗ GOV.UK

5 Jan 2023 | Committee report linked

On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to remove the barriers preventing the cheapest and quickest onshore low-carbon technologies from being rapidly deployed. A number of witnesses have raised the challenges that low-carbon generators face in securing appropriate grid connections and how to manage l...

On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to …

▤ View document · ↗ GOV.UK

13 Nov 2022 | Committee report linked

Ofgem did not strike the right balance between promoting competition in the energy suppliers market and ensuring energy suppliers were financially resilient. During the 2010s, Ofgem focused on attracting new firms to the sector to increase competition and reduce costs to consumers. Issues first began to emerge with the financial resilience of new entrants in 2018 but Ofgem did not tighten requirements for new suppliers until 2019, and for existing energy suppliers until 2021. Ofgem acknowledg...

Ofgem did not strike the right balance between promoting competition in the energy suppliers market and ensuring energy suppliers were financially resilient. During the 2010s, Ofgem focused on attracting new firms to the sector to increase competition and reduce costs …

▤ View document · ↗ GOV.UK

13 Nov 2022 | Committee report linked

We are concerned that the Department and Ofgem do not yet have a clear vision of how the energy retail market will work in the best interests of customers during the transition to net zero. The UK is seeking to transform its energy generation system away from gas, towards domestic and renewable sources of energy. The Department is looking at the appropriate market arrangements for electricity in the future as the UK transitions to net zero. New forms of regulation could also be required to en...

We are concerned that the Department and Ofgem do not yet have a clear vision of how the energy retail market will work in the best interests of customers during the transition to net zero. The UK is seeking to …

▤ View document · ↗ GOV.UK

13 Nov 2022 | Committee report linked

In the decade after it was opened to competition, the UK energy supplier market consisted of six large energy companies and a similar number of smaller suppliers. Since 2010, smaller companies have entered the domestic energy supplier market in greater numbers.11 Ofgem told us that a small number of energy suppliers took advantage of customer loyalty to generate profits of up to 8%, equivalent to nearly £250 on top of the cost of energy. In 2016 it had therefore decided to prioritise opening ...

In the decade after it was opened to competition, the UK energy supplier market consisted of six large energy companies and a similar number of smaller suppliers. Since 2010, smaller companies have entered the domestic energy supplier market in greater …

▤ View document · ↗ GOV.UK

13 Nov 2022 | Written evidence linked

Ofgem’s proposals have drawn a range of reactions from stakeholders across the sector.17 We received written evidence from suppliers who told us that they welcomed aspects of Ofgem’s proposals to improve financial resilience, such as raising capital adequacy requirements and ring-fencing customer credit balances.18 Some suppliers told us that there was scope for the reforms to be more ambitious. For example, SSE and E.ON suggested that Renewables Obligation payments should be made more freque...

Ofgem’s proposals have drawn a range of reactions from stakeholders across the sector.17 We received written evidence from suppliers who told us that they welcomed aspects of Ofgem’s proposals to improve financial resilience, such as raising capital adequacy requirements and …

▤ View document · ↗ GOV.UK

26 Jul 2022 | Committee report linked

The Special Administration Regime has been used for the first time to deal with the failure of Bulb Energy, leaving taxpayers exposed to billions of pounds worth of costs. The decision not to implement a hedging strategy may have led to the sale of Bulb being less desirable and significantly increased costs to taxpayers.

The Special Administration Regime has been used for the first time to deal with the failure of Bulb Energy, leaving taxpayers exposed to billions of pounds worth of costs. The decision not to implement a hedging strategy may have led …

▤ View document · ↗ GOV.UK

26 Jul 2022 | Committee report linked

The previous Energy Retail Market Strategy was primarily driven by the objective to accelerate switching rates. The collapse of energy retailers demonstrated the flaws of this approach. The revised retail strategy will need to develop a market that differentiates not just on price, but on the services offered by suppliers. It needs to create incentives for customers to make the investments needed to decarbonise their homes and reward suppliers for providing enticements to reduce demand. It wi...

The previous Energy Retail Market Strategy was primarily driven by the objective to accelerate switching rates. The collapse of energy retailers demonstrated the flaws of this approach. The revised retail strategy will need to develop a market that differentiates not …

▤ View document · ↗ GOV.UK

26 Jul 2022 | Committee report linked

The Department and Ofgem must urgently update the Energy Retail Market Strategy so that the supplier retail market aligns with our net zero target; this must include interim milestones and high-level principles about the role suppliers will play in achieving net zero.

The Department and Ofgem must urgently update the Energy Retail Market Strategy so that the supplier retail market aligns with our net zero target; this must include interim milestones and high-level principles about the role suppliers will play in achieving …

▤ View document · ↗ GOV.UK

26 Jul 2022 | Committee report linked

The energy price crisis is putting continued strain on the remaining suppliers in the market. At the same time, Ofgem is proceeding with a programme of major regulatory reform with the objective to reverse its previous litany of shortcomings and shore up the financial resilience of the market. However, if its policies are poorly designed and executed, they could have the opposing effect and further destabilise the market, at additional cost to households and/or taxpayers. We remain unconvince...

The energy price crisis is putting continued strain on the remaining suppliers in the market. At the same time, Ofgem is proceeding with a programme of major regulatory reform with the objective to reverse its previous litany of shortcomings and …

▤ View document · ↗ GOV.UK