Future supply market arrangements call for evidence response—Reforming the ‘supplier hub’ model

Future supply market arrangements call for evidence response—Reforming the ‘supplier hub’ model

Energy analysis: A call for evidence on the regulatory framework for gas and electricity retail has shown that most stakeholders want reform in the sector. Matthew Collinson, Legal and Regulatory Director of Energetics, analyses the responses to the call for evidence on future supply market arrangements.

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In brief, what is the background to this response?

The regulatory framework for gas and electricity retail is built (in part) on the 'supplier hub' principle. This means that gas and electricity suppliers - the entities that end customers contract with for their gas and electricity - are the only point at which end-customers interface with the energy system. Everything else is flowed back to other industry participants through Ofgem licences and industry codes. Industry codes are multilateral agreements that underpin the legal, commercial and operational interactions of industry participants.

Evidence gathered by Ofgem through its 'Innovation Link' suggests that this arrangement may be inhibiting innovation in the sector. The 'Innovation Link' is promoted as a 'one stop shop' offering support on energy regulation to businesses looking to introduce innovative or significantly different propositions to the energy sector.

Ofgem was also no doubt influenced by the conclusions of the Competition and Markets Authority's Energy Market Investigation to the effect that the volume and complexity of retail in

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