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DECC

DECC Consultation: Ofgem Review: Call for Evidence

ACE has submitted a written response to the Department for Energy and Climate Change consultation: “Ofgem Review: Call for Evidence”

To read our full response please Click here.

Response Summary

Ofgem is not currently delivering an effective service that will help the UK achieve its carbon reduction targets at the lowest cost to the consumer. At present the regulator is focused on keeping the unit price of energy as low as possible – a worthy aim, but one than risks higher overall costs for consumers as progress on delivering carbon reduction targets step up. Ofgem must become more concerned with the cost of energy services – which consumers actually value – as opposed to the unit cost of the commodities which deliver them. Ofgem’s role going forward must be as an entity tasked with ensuring carbon reduction targets are achieved as the lowest cost possible: this must include reducing the amount of energy consumed for heating in the UK, a service that will increasingly become electrified, and which will be far more economic for the UK the fewer units households need to consume. Ofgem must continually assess, on a least-cost planning basis, whether investment in supply side technology could be avoided though cheaper investment in demand reduction, and have powers to ensure improvement works take place if (as is likely) this is the case.

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