Response to Ofgem’s consultation on their Draft Forward Work Plan 2017-18

The past year included a number of events which will impact the energy sector significantly over the medium term. The Competition and Market Authority (CMA) energy market investigation was concluded, and its remedies and recommendations are now in the process of being implemented. The proposal to create a legally separate system operator is another step towards managing rapid change in networks, which need to become more flexible in response to distributed and intermittent generation. Meanwhile the UK’s decision to leave the European Union will introduce uncertainty about Great Britain’s role in the integrated energy market. Alongside these changes, the regulator is also committed to delivering a number of reforms affecting almost all parts of the industry, including the conclusion of Project Nexus, electricity settlement reform and faster switching. Many of these changes rely on the successful and timely rollout of smart meters.

The challenges of delivering these highly interdependent changes in a short timeframe cannot be underestimated, particularly given the poor track record of the energy industry in delivering large scale change. They will have significant impacts on consumers, carrying both opportunities for better services and lower costs, and some new risks, which will need to be mitigated. In order to manage these changes successfully Ofgem needs to be adequately resourced and work in an agile way with close engagement from stakeholders.

We have responded [ 61 kb] to those aspects of the forward work programme where we have particular views on Ofgem’s priorities over the coming year. We set out how we intend to work with Ofgem in certain areas, and where our and Ofgem’s work plans for the next year coincide.