Energy market governance must be modernised – new report calls for system change
The energy market is often characterised by poor consumer outcomes, difficulties launching innovative business solutions, and a vicious circle of increasing regulation and complexity to deal with market failings – so says a new report from energy market governance experts Gemserv.
To address this, their report – ‘Modernising Energy Governance (Part 3) – Forging Ahead’ – encourages businesses, government and the regulator to get behind a new Target Operating Model that promises to unleash innovation and competition for the benefit of consumers.
Trevor Hutchings, Director of Strategy and Communications at Gemserv, commented:
“We have drawn insights from a wide cross section of stakeholders, including our Innovation Forum and Citizens Advice, to help develop our recommendations.
We would like to simplify the way new business models enter the market. This needs to be coupled with targeted rules to address market level risk while reducing regulatory burden where there is less risk. And we must unleash the full potential of data and digital technology”
The report makes three core recommendations:
- Single Portal: a single access portal for market participants thereby avoiding the need to navigate multiple entry points across multiple regulatory and governance organisations;
- Market Assurance: instigate a retail market risk review and then design and implement an energy market assurance approach in which rules are applied according to market risk rather than the largely one-size-fits-all tick box approach of today; and
- Data and digital transformation: develop and implement a market-wide, data and digital transformation strategy, starting by addressing the disparate governance arrangements for gas and electricity data.
Trevor further commented:
“An immediate start towards this new future can be enabled through the new Retail Energy Code which Ofgem and industry are currently developing.”
To read Modernising Energy Governance (Part 3) – Forging Ahead, simply click the link below*: