Lords Committee calls for evidence on Ofgem’s role in helping the UK achieve its net zero emissions targets
The UK’s energy market regulations need a dramatic overhaul if the nation is to hit its goal of net-zero carbon emissions at an affordable cost, two academics told the House of Lords Industry and Regulators Committee earlier this week.
Scrutiny of Ofgem’s role
The Committee which was held on Tuesday took evidence and feedback from several academics, consumer groups and energy companies to assess Ofgem’s role in the UK’s net-zero emissions transition by 2050.
Currently, Ofgem oversees the UK electricity and gas markets but has seen more and more responsibilities being handed to it regarding decarbonisation.
The Lords Committee is looking into whether the regulator will be able to continue to effectively regulate the energy market, deliver on the increasing environmental policies made by the government and ensure that energy supplies are at their lowest possible cost to the consumer.
It is inviting written evidence from interested individuals and organisations by 22nd August 2021.
The main questions the committee are seeking answers for include:
- What is Ofgem’s role in the transition to net-zero?
- Does Ofgem’s work on net zero-conflict with consumer interests?
- What are the implications of net zero for the security of the UK’s energy supply?
- How effective is Ofgem as a regulator and do its objectives or powers need to be changed?
- Is Ofgem sufficiently accountable to Government and Parliament?
Also read: Ofgem sets out plans to hit net-zero carbon emissions by 2050
Lacking powers?
Catherine Mitchell of Exeter University and Jeffrey Hardy from Imperial College, London told the committee that Ofgem lacks the powers it needs to drive the scale of changes that need to be made to the energy sector in the time available.
The academics stated that the energy market has altered beyond all recognition since the gas and electricity power markets over 30 years ago and new powers are required if Ofgem is to stay fit for purpose.
Committee Chair Lord Hollick said: “This inquiry kickstarts the Committee’s scrutiny of the UK’s regulators. Ofgem regulates the UK’s electricity and gas markets, giving it a key role in overseeing a sector that is crucial to meeting the UK’s net-zero target. The target is likely to lead to an even greater role for electricity in sectors such as heating and transport, increasing demand and potentially putting greater pressure on Ofgem to provide reliable, green energy without an unaffordable increase in energy prices. The inquiry will look at Ofgem’s role in the net-zero transition, scrutinising its regulation in relation to the target and the potential impacts on energy consumers and the wider energy system.
“The Committee wants to hear from a broad range of people as part of its inquiry. If you have a view on Ofgem or energy regulation more widely, please look at our call for evidence and let us know what you think.”
The committee is inviting written evidence from interested individuals and organisations by 22nd August 2021.
Also read: Ofgem wants a new independent body to lead the way to Net Zero
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Further Reading
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UK and Norway trade deal to bolster non-EU energy imports
Ofgem widens the Voluntary Redress Scheme to include community energy groups
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