Ofgem
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OPENING UP ELECTRICITY MARKET TO EFFECTIVE COMPETITION

  • Ofgem proposes to establish a more level playing field so independent suppliers can compete effectively with the big six
  • Big six suppliers* and largest independent generators must trade fairly with small suppliers or face financial penalties
  • Wholesale energy prices to be more transparent with big six required to post prices two years in advance
  • Ofgem’s proposed reforms build on progress made by the industry, but seek to increase competition and address issues of fairness and transparency
Ofgem has yesterday published final proposals that will give independent energy suppliers a more level playing field to compete against their larger rivals. They will also increase competition between the big six who, together with the two largest independent power generators *2 will be required to trade fairly with small suppliers.

Under the proposals, the big six suppliers will have to post the prices at which they buy and sell wholesale electricity on power trading platforms up to two years in advance. They will be obliged to trade at these prices, which means independent suppliers and generators will have far more opportunities to buy and sell the power they need to compete effectively. Posting prices in this way will make wholesale prices clearer for all firms in the market. The new licence conditions will be backed by Ofgem’s powers to fine companies if they are in breach.

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