Today I am publishing the Government’s final report of the review of Ofgem, the energy regulator for Great Britain. This review delivers on our commitment to ensure that consumers remain well protected from bad practice and that Ofgem is equipped to regulate a rapidly changing energy system. The current situation in the middle east has once again highlighted the need to protect consumers, particularly during times of volatility, and Ofgem’s ability to respond in times of crisis. The review has examined whether Ofgem’s remit, duties and capabilities remain fit for purpose in an energy landscape shaped by rising demand for clean power, new technologies, and the need for greater resilience and fairness for households and businesses.
In particular, I am pleased to highlight that we will equip Ofgem with stronger powers to take action where needed and to deter bad practice across the sector. The review will also bring enhanced protection for energy consumers, not only by reinforcing its commitment to the protection of consumer interests, but by granting it a stronger mandate to support delivery of clean home-grown power and support investment and growth in the UK.
The review gathered extensive evidence, including over 20,000 responses to the public call for evidence, alongside detailed engagement with consumer groups, suppliers, networks, generators and investors. In addition, the review drew upon the knowledge of an advisory panel comprised of specialists appointed in their individual capacity to ensure independence and diversity of thought, bringing a wide range of experience and perspectives to challenge and guide the review.
The conclusions are clear: Ofgem plays an essential role in our energy system and its statutory duties, regulatory boundaries, and organisational capabilities must be modernised to meet the challenges now, and in the years ahead.
The review also considered Ofgem’s role across the energy system as a whole, recognising the significant interdependencies between generation, networks, system operation, retail markets and emerging flexibility services. Stakeholders highlighted that the energy system is evolving rapidly with decentralised generation, electrification, digitalisation and new business models reshaping how power is produced, transported and consumed, but regulatory frameworks have not consistently kept pace. Evidence indicated that Ofgem must be equipped to oversee the system in a more coherent, end-to-end way, ensuring that decisions taken in one part of the system do not create unintended consequences elsewhere. This includes ensuring efficient network investment, enabling integration of low-carbon technologies, and supporting the development of retail and flexibility markets that deliver genuine consumer value.
To address these challenges, the Government will strengthen Ofgem’s system-wide mandate and capabilities so that it can take whole-system, forward-looking decisions that reflect the interactions between different segments of the value chain. This will help Ofgem to anticipate pressures, drive innovation and competition, and support a more dynamic, efficient and consumer-centric energy system. By ensuring that Ofgem can regulate the energy system as an integrated whole, these reforms will promote efficient investment, enable the scaling of new technologies, and ensure that consumers benefit from a system that is resilient, fair and aligned with the UK’s long-term energy security and net zero commitments. The Government are therefore bringing forward a package of reforms to strengthen Ofgem’s mandate, improve regulatory clarity and reduce duplication, and ensure that the regulator can act more proactively in the interests of consumers. Key measures include:
Strengthening enforcement and redress mechanisms so that Ofgem can act quickly and decisively when consumers face harm, including stronger powers to address poor service and hold senior energy company leaders to account.
Modernising Ofgem’s statutory duties, streamlining them into three clear pillars of consumer protection, economic growth and delivery of net zero. This will ensure that Ofgem can take clearer, more strategic decisions that directly benefit households and support long-term national priorities. Establishing an Ofgem-specific strategy and policy statement, providing clarity on the Government’s strategic expectations while preserving Ofgem’s operational independence.
Boosting Ofgem’s organisational capability, including digital, technical, financial and analytical expertise, to enable a more agile, confident and evidence-driven regulator.
Introducing new transparency and accountability requirements, including regular public progress updates and a five-yearly independent review of Ofgem’s performance.
These reforms will create a regulator that not only protects consumers but supports an energy sector that can innovate, invest and improve the customer experience. They will help build a more resilient, fair and modem energy system as we accelerate towards clean power and strengthen the UK’s energy security.
A copy of the Ofgem review final report will be placed in the Libraries of both Houses. The Government will now work closely with Ofgem, industry and consumer groups to take forward the implementation of these reforms.
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