OFGEM Restructuring Requires Engagement Alteration

Share on facebook
Share on twitter
Share on linkedin

On 11 July 2019 Ofgem published its strategic narrative for 2019-2023. In this document Ofgem reiterated its commitment to competition and consumers. However, it also signposted a change in the way it would operate going forward. The energy industry has to be mindful of these changes and have a strategy for addressing them. If it fails to do so it may be caught flatfooted by future regulatory changes, without knowing who to express its concerns to.

OFGEM is changing the way it works

Ofgem is proposing to fundamentally shift the way in which it is organised. This may require the sector having to shift its method of interacting with the regulator. In its strategic plan Ofgem states that ‘Ofgem has traditionally worked like many other bureaucracies, with a hierarchical structure, formal lines of authority, and a fairly rigid division of labour among people with expert training in their fields…This traditional way of working can lead to inefficiencies, a slower response to changing business and industry needs and a less stimulating working environment for staff.’[1] It advocates ‘a more agile way of working, which is more project-based and less durable in structure, with teams forming and reforming more often.’[2]

Established lines of communication may need to change

With a new organisational make up, which focuses on Ofgem concentrating resource as required, industry may find it needs to be more nimble to identify relevant stakeholders. If Ofgem delivers on its commitment to ‘operate in a more decentralised way and with more autonomy, sharing knowledge and joint internal decision-making,’[3] then industry may need to get used to engaging with wider webs of influence within Ofgem. Only by doing so will it be able to keep aware of who it needs to know to ensure policymaking is properly informed. Should Ofgem change to the extent that decision making power becomes both more diffuse and circumstance dependent, businesses will need to maintain high levels of engagement to know they are dealing with the right person.

Engagement is needed now to get ahead of the game

Ofgem is planning to publish further detail on its change plan.[4] Industry would be well advised to engage while that process is ongoing to ensure it understands what is coming and when. At the very least, doing so will help businesses remain equipped to address regulatory risks that surface now and in future. Without engaging companies could be leaving themselves vulnerable, as well as unaware of who to turn to in the event of adverse circumstances.

Brevia Consulting provides straightforward political advice and support to business and organisations.

Discover how Brevia can help you and your organisation by contacting the Brevia Energy Team on 020 7091 1650 or contact@brevia.co.uk


[1] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

[2] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

[3] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.25, link

[4] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

LATEST NEWS

Brevia

Energy White Paper Audit

Last week Brevia Energy released the findings of its audit of the Government’s 2020 Energy White Paper. The results, which were covered by Energy Live News, highlighted how nearly half of the commitments included in the Energy White Paper have been hit or look likely to be reached. However, the research also showed that answers to the ‘Who Pays?’ question remain needed. With the Government expected to publish both its Net Zero Strategy and Heat and Buildings strategy soon, greater detail on that may be soon forthcoming. That is likely to provoke debate about the direction of policy and open new fronts for businesses to make their case about how the net zero transition should be delivered.

Read More »
Energy

At-risk suppliers have put the energy supply industry at risk

Since the beginning of August 2021, the UK has experienced a record increase in gas prices, which has grown into a retail energy crisis that has already caused ten suppliers to exit the market this year. This crisis is the product of several factors, which the UK Government will seek to remedy in the short term and avoid in the long term. This means regulatory reforms are almost inevitable. Once the crisis is over and government turns to reforming the UK’s retail energy market, businesses that operate within it must actively engage with policymakers and regulators to ensure their voices are heard.

Read More »
Energy

COP26 Update: New Energy Minister

With less than 50 days until the COP26 Summit, Brevia will be tracking the latest milestones in the UK’s preparations for the upcoming climate conference. This week the Prime Minister carried out an extensive reshuffle of his ministerial team, including a shake up at BEIS, with Greg Hands MP becoming the new Energy Minister. Other notable highlights this week include the publication of the funding details for the upcoming Contracts for Difference (CfD) Round 4 auction.

Read More »
  • Get in touch to arrange your free monitoring trial.