The database was one of the recommendations made by the Competition and Markets Authority (CMA) in 2016 following a two-year investigation of the retail energy market.
In April, the regulator halted work on the development to review if it was on the right track to deliver the best outcomes for disengaged customers “in the most appropriate way”.
The review found there may be more effective ways of enabling the data to be shared and Ofgem has, therefore, decided not to develop the database at this time.
Anna Rossington, Deputy Director, Consumers and Markets at Ofgem said in an open letter: “The database remedy was one of a number of CMA remedies aimed at addressing the detriment incurred by disengaged consumers on poor value default tariffs. Following government legislation, Ofgem implemented the default tariff cap at the start of this year. The cap provides protection to all customers on default tariffs and has removed around £1bn of consumer detriment.
“We consider our focus should be on determining how best to ensure that the retail energy market works more effectively when the current price cap is lifted – as it must be no later than 2023. This includes developing measures to promote competition and enables innovation, while ensuring consumers remain engaged and protected in this more complex world.”
Ofgem adds its work on the database remedy has been instrumental in the development and testing of a number of consumer engagement schemes, including the Collective Switch, which helped boost switching rates and resulted in more than £21.3 million in savings for consumers.