Energy markets and the regulatory regime that supports them are under scrutiny as prices soar and the industry grapples with the challenge of maintaining security of supply whilst transitioning away from fossil fuels.
The government is expected to announce changes shortly to the regulatory regime, possibly including changes to the remit of Ofgem, the gas and electricity market regulator.
Balancing security of supply, sustainability and consumer protection is never easy and requires action by government as well as the independent energy regulator and other regulatory and competition authorities. There is a general recognition that energy regulation needs to adjust to new circumstances, including heightened concerns about security of supply as Europe reduces its dependency on Russian fuels. But there is always a danger that reforms could help solve one set of problems whilst unintentionally making others worse.
Speaking at today’s MEUC Expo event in Westminster, Jeremy Nicholson, Alfa Energy’s Corporate Affairs Officer, welcomed the review of energy regulation but sounded a note of caution:
“It’s tempting to think the answer to current problems is more government intervention in the energy markets and their regulators. This may indeed be necessary in some instances, but we should be careful not to lose the benefits of vigorous competition and independent regulation which for many years delivered great benefits to consumers, including business energy users.”
“There is a good case for reviewing Ofgem’s remit and subjecting its performance to greater scrutiny. But be careful what you wish for. History does not give confidence that greater political interference in the energy markets would benefit consumers.”
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