Select committee: Industry and Regulators Committee
Conclusion 20
1st Report - The net zero transformation: delivery, regulation and the consumer
Published 4 Mar 2022
Paragraph 172
Industry and Regulators Committee Ofgem and net zero All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
It is clear that the service that retail energy companies provide will have to change to help consumers through the transition, including by providing new products and services that enable them to spread up-front capital costs and to realise the value of providing flexibility to the grid . However, it is far from clear that the industry or the regulator are ready to adapt their approaches in this way. Ofgem must ensure that its regulation allows new models to benefit consumers through its regulation of activities carried out by suppliers, its expectations of industry and through enabling more granular pricing. Ofgem should also make it easier for successful firms to make use of existing mechanisms to support innovation , such as the regulatory sandbox.
From: Industry and Regulators Committee, 1st Report - The net zero transformation: delivery, regulation and the consumer, paragraph 172, 4 March 2022
Government response
The government responded to the whole report on 27 May 2022 (deadline 25 May 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government sets out actions across the report's themes, declining to target a specific 2050 energy mix and to add a net zero duty for Ofgem, while agreeing with the committee on the retail market and consumer engagement.
- On a roadmap to net zero, it says the exact 2050 technology and energy mix "cannot be known now". It commits to a public update every year from 2022 on progress against the Net Zero Strategy pathway.
- On Ofgem, it says "A new duty is not necessary", stating that the duty to protect consumers' interests already includes reducing emissions in line with net zero. It has committed to consulting on a Strategy and Policy Statement for Ofgem "later this year".
- On a net zero taskforce, it states that "Our current governance arrangements are effective" and describes existing ministerial committees. It is creating a Future System Operator with objectives set out in primary legislation.
- On the energy retail market, it says "We agree with this view" on consumer engagement. It will refresh the retail market strategy, aiming to publish an update "as soon as possible, once the market has stabilised".