Guidance

Measures to strengthen Ofgem

Published 4 November 2026

Factsheet relating to the Energy Independence Bill.

Summary

Through its review of Ofgem, the government outlined a program of reform to modernise the energy regulator so it can strengthen consumer protection in a rapidly changing energy market. These measures will take forward the legislative changes required to address the findings of the Ofgem Review and ensure that it, along with its approved redress scheme providers, can act effectively in the interest of all consumers.

Why are we legislating?

Since Ofgem’s inception over 25 years ago, the energy system has evolved at pace. Advances in the way we produce and consume energy bring flexibility and opportunities for consumers but also introduce new challenges that the energy regulator must be equipped to address, to ensure that consumers remain protected from harm. Ofgem must have the right statutory framework, remit and tools to take a strategic and robust approach to its regulation of the sector, take effective action against poor practice and proactively prevent consumer harm.

Ofgem’s current statutory framework is no longer fit for purpose. Decades of accumulated duties have led to a complex landscape for decision making. At times this has hindered Ofgem’s ability to promote the long-term interests of consumers and communities that will be realised through the transition to cleaner, cheaper energy. Refocusing Ofgem’s statutory framework in the context of a changing energy landscape is vital to its role in providing the highest level of protection for consumers and ensuring that their interests are at the forefront, both now and in the future.

Furthermore, with the development of new technology and innovative services, we must ensure that appropriate regulatory safeguards can be put in place to enable consumers to take advantage of the benefits these bring. Updating Ofgem’s regulatory remit and making it easier for Ofgem to quickly respond to new and emerging regulatory needs will ensure that it can adapt to emerging challenges throughout the energy transition.

Ofgem’s powers have at times been inadequate in deterring poor practice and we are taking steps to enable more effective enforcement action against wrongdoing in the sector. By extending and updating Ofgem’s statutory powers, as well as those relating to redress providers, we will enable Ofgem to take a more robust approach to enforcement, ensuring that consumers are better protected in the energy market.

What are the government’s objectives with this measure?

These measures will ensure that Ofgem has a strong mandate to protect consumers in a rapidly changing energy sector and will facilitate the transition to a cleaner energy system that will bring long-term consumer benefit. They will ensure that government can provide the regulator with clear strategic steers, enabling it to best support the government’s ambition to create a more affordable system for consumers.

Protecting consumers also requires the regulator to make clear, strategic decisions that support the delivery of long-term benefits from the transition to a cleaner energy system. By streamlining Ofgem’s statutory framework we will reduce the complexity of regulatory decision-making, bring greater transparency and regulatory certainty that will encourage much needed investment in our energy system.

The regulator has a key role to play in encouraging innovation and supporting the expansion of low-carbon technology that will deliver a cleaner, cheaper system. Enabling Ofgem to respond flexibly to new and emerging regulatory needs will provide reassurance to consumers as they explore ways in which new products and services can better meet their energy needs.

Expanding Ofgem’s remit and powers will ensure that it is properly equipped to respond to new and emerging consumer harms, deter bad practice and take quick and effective action where needed. This, alongside strengthened provision of redress, will help to restore trust in the sector, and ensure that regulation works in the interests of consumers.

How will this measure deliver the objectives?

These measures will ensure that consumer interests are at the centre of energy regulation. They will restructure Ofgem’s statutory duties in a way that will grant it a stronger mandate to protect consumers holistically and support the delivery of cheaper, cleaner energy. Providing stronger strategic steers will ensure greater alignment with the government’s commitment to ensuring that energy is more affordable for all.

Revising its enforcement powers will enable the regulator to take more effective enforcement action where there is bad practice and ensure that consumers are treated fairly by suppliers in the market. Similarly, providing Ofgem with the means to respond quickly to new regulatory needs will ensure that consumer protection is maintained across the system as innovative products and services emerge.