Letters: A priceless ofgem? Don’t scrap us, says CEO
[Re: Is it time for Ofgem to head to the scrapheap? Feb 24]
This article underplays both the history and the current circumstances affecting the energy market.
In 2010, the market was dominated by a small number of large vertically integrated players without pricing regulation. For customers, this meant systemically high prices and poor service – this is not a world that any of us wish to return to. In that context, energy policy and regulation, including the introduction of the price cap, focussed on protecting millions from unfair profiteering so that consumers could get the best deals possible, as well as ensuring a safe, reliable supply of energy.
In a system like Britain’s, where gas heats most homes and plays a large role in electricity generation, the seismic shocks we have seen in global gas prices have led to unprecedented market volatility. With Russia’s invasion of Ukraine, this shows no signs of abating. That volatility exposed that regulation around the financial resilience of energy companies needed to be better – with hindsight Ofgem could have gone further, faster. The steps we have taken to stabilise the market and improve its resilience will make sure all participants are tested more rigorously and held to higher standards. Equally, the price cap to become more adaptable to the market conditions the sector now faces.
Our role is to protect consumers interests in the energy market now and in the future. I believe we can address the issues highlighted by the gas crisis, working in partnership with the industry and consumer groups to build what we need – a resilient, competitive and dynamic energy sector – more fit to support the transition to Net Zero.
Jonathan Brearley CEO, Ofgem