Gemserv welcome the opportunity to provide evidence with respect to the Helm Energy Review.
Our response draws heavily from the unique insights and energy market experience in our capacity as a central code governance body spanning over 15 years across electricity and gas. Gemserv’s consultancy services work covers a wide range of energy policy and regulatory aspects, including: price controls, customer switching, smarter markets, assurance, information and cyber security. We are at the heart of the fundamental market reforms already underway and experience first-hand the challenges and the opportunities that arise across the entire energy sector.
In summary, our evidence highlights the following:
- There are significant benefits to supporting existing investment commitments and enabling cost/benefit outcomes to mature over time. Policy and regulatory action should be viewed as long term interventions, based on well-informed data, be targeted, and proportionate to the matter at hand. Our experience indicates this is not always the case, e.g. the Competition and Markets Authority (CMA) energy market investigation found that, while the intention of restricting the number of tariffs an energy company could offer was justified, this rule hindered, rather than supported competition.
- The key to developing a well-functioning market, one which delivers services efficiently and cost-effectively, should be based on stimulating competition and using regulation to support competition and protect consumers. A ‘broken market’ narrative does not support this approach, and indeed this has led to adverse outcomes, including harming consumer confidence in markets. Rather, promoting the benefits of competition increases investor and consumer confidence, leading to a more competitive market, delivering benefits including driving competitive prices via a more engaged consumer.
- A less siloed energy market thinking and a more ‘whole of market’ approach is required to ensure that trade-offs in one part of the energy market do not then have negative outcomes in another. For example, examining the energy price challenges from a Supplier Hub perspective is helpful, but of itself is not the core challenge.
- Existing central code body expertise provides a valuable resource to help inform on policy, market design and regulatory development. More could be done to exploit this resource, including formalising the support to government and regulators.
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