Recommendation 18

Ofgem told us that the price cap had not been sufficiently adaptable to the “once in a generation change” in wholesale prices during the winter of 2021–2022.43 We asked Ofgem whether it had considered the possibility of high wholesale energy prices in designing the price cap. Ofgem told us that it had envisaged that there would be changes in wholesale costs, and put in place what it thought would be sufficient mitigations, including considering reducing the enforcement of the price cap in extreme circumstances. But it recognised that these mitigations had not considered the scale of the changes that had been seen in the energy market, or the circumstances in winter 2021–22.44