In this report, Ofgem assess how well energy markets are working for consumers in achieving these outcomes. It is the second annual assessment of Ofgem related to the state of energy markets in Great Britain. It focuses on developments in the energy markets over the past year.
British households and businesses spend around £50 billion on energy each year and their experience of the energy market is mainly via the retail side of the market. This is where trends elsewhere in the market will have their most immediate effects on consumers. For example, disruptive business models and innovative technologies, combined with environmental policies, are shaping the energy sector and feeding into
consumers’ energy bills. There have been many positive developments in retail markets since we began implementing the remedies set out in 2016 by the Competition and Markets Authority (CMA). Consumers now have more suppliers and innovative deals to choose from than ever before, and it is becoming easier for consumers to switch tariffs and suppliers.
However, the retail market is still not delivering the desired outcomes for all consumers. This is the reason that impulses to extend the price protection, originally introduced for customers on prepayment meters, to a further one million vulnerable customers receiving the Warm Home Discount. In July 2018, Parliament mandated us to take further action by introducing a temporary price cap on all standard variable and default fixed-term tariffs.