Interim CEO of Ofgem Andrew Wright, who has been tasked with overseeing reforms to the energy market, yesterday admitted he was unsure what a successful reform would lead to.
“The cop out answer is we are just starting a programme of work… to answer that question,” he told attendees at an Ofgem event.
The revelation is likely to attract criticism as this would not be the first time the energy regulator has investigated the market.
Ofgem had previously researched sector competitiveness in 2009 and implemented a number of rules based on its findings.
Annual competition reviews to determine competitiveness of market
The energy regulator has now announced that it will be holding yearly competition reviews working in tandem with the OFT and new Competition and Markets Authority.
Wright described the organisations as collaborating to build a “framework for the assessment of competition” including matters such as “consumer engagement [and] consumer satisfaction” and to ensure the market was geared towards encouraging competition.
Reforms aim to increase ‘competitive pressure on suppliers’
Speaking on the issue, a spokesperson for Ofgem said the regulator had commissioned consumer research to determine whether reforms would work towards restoring trust in the energy industry.
Ofgem is also studying the impact of the reforms in terms of “increasing competitive pressure on suppliers” and making sure they “are beginning to offer the right sort of products that consumers want” at a competitive price.
Suppliers likely to welcome news
Ofgem’s announcements are likely to go down well with a number of energy suppliers which have called for more investigations into the energy market.
EDF and E.ON in particular, have been vocal in asking for the regulator to look into the sector as they believe this will help rebuild consumer trust in energy companies following a series of gas and electricity price hikes.