Utility Week

The Month in Review An energy market with less switching may need 'tougher' regulation Ofgem may need to introduce "tougher" regulation to safeguard customers in a market where there can be less reliance on switching to drive down prices, Jonathan Brearley has told MPs. Under grilling by the House of Commons Business, Energy & Industrial Strategy Committee in early February, the Ofgem chief executive also said the regulator should be able demand redress from bosses of suppliers that go bust. Even before the recent surge in wholesale gas prices, nearly half of energy customers were not actively engaging with the market by switching supplier, Brearley said: "Now we are in a more volatile market, we need a retail sector that is tougher and more resilient. We accept that had we done that earlier, this would have been better for customers. "A large number of people are not switching. When we look at the future of retail regulation and driving up customer service standards, we may have to accept that as more of a reality and therefore think differently about how the other things customers want are implemented. "If there is less reliance on switching as the only way of driving up performance and managing price, we will need a different form of regulation. "Switching played a substantial part but we need to look more broadly at how we regulate the retail sector to make sure customers can get out of it what they need. "We need to think harder about how to regulate that part of the market that doesn't shi‰." He said while it is "quite possible" that the price cap could be removed, the market will need to "change quite considerably" first. Brearley also said Ofgem should have redress against directors of suppliers, who pay themselves large sums, if their companies go bust a‰er charging low prices to lure in customers. "We don't have redress in those circumstances: I think we should." While the mid-2010s had seen a "shared ambition" by the government and Ofgem to encourage smaller suppliers to enter the market, Brearley said the regulator accepted that it should have taken a "tougher" approach to regulating the market in recent years. • As Utility Week goes to press, Ofgem has announced that suppliers will be barred from offering cheaper, exclusive tariffs to lure new customers on a temporary basis, as part of its twin-pronged package designed to stabilise the energy market. For the latest developments, see: https:// utilityweek.co.uk/category/energy-reset/ £78m Investment Severn Trent is committing to improve water quality along 49km of the rivers Leam and Teme as part of its green recovery investment programme. 75% Increase in demand for services seen by the Fuel Bank Foundation over the past year. CfD auctions to be held annually The Department for Business, Energy & Industrial Strategy (BEIS) has announced that, starting in March 2023, Con- tracts for Difference (CfD) auctions will be held on an annual basis rather than once every two years as has previ- ously been the case. The department said the annual auctions will include onshore wind and solar pro- jects, which were excluded from the second and third allocation rounds but are par- ticipating in the fourth round that closed to applications on 14 January. "We are hitting the accel- erator on domestic electricity production to boost energy security, attract private investment and create jobs in our industrial heartlands," said business and energy sec- retary Kwasi Kwarteng. "The more clean, cheap and secure power we generate at home, the less exposed we will be to expensive gas prices set by international markets." BEIS said the CfD scheme has helped to bring down the costs of offshore generation by 65% since the first auc- tions were held in 2015 and enabled the UK to become one of the world's largest gen- erators of wind power. The Month in Review Utility Week Awards set to re-unite industry The postponed 2021 Utility Week Awards will take place on Monday 21 March at the Grosvenor House Hotel, London. It promises to be an unforgettable reunion of industry leaders, influencers, and innovators, meeting in person for the first time in over two years, as we reveal the winners across 13 categories. You can see the shortlist, browse our table packages and secure a prime spot by going to: https://www.utilityweekawards.co.uk/

• Cover