The UK’s energy system must change at every level to meet the needs of future consumers, with or without the net zero target, Ofgem CEO Jonathan Brearley will tell a major industry conference today.
Mr Brearley is expected to outline how the regulator plans to tackle soaring energy debt, now at a record £4.4 billion, while maintaining high consumer service standards as the country shifts towards renewable power. He will confirm plans to overhaul how the sector supports customers in debt and address the historic arrears built up during the energy crisis.
At the Energy UK annual conference on Tuesday, Mr Brearly is expected to say: “Debt is a huge problem for our sector – not just for those households carrying the stress and worry of that debt but for all households, who end up bearing the cost of that unrecoverable ‘bad debt’ on their bills.
“It also impacts the ability of the sector to invest, innovate, and compete. So we need to make sure the system is fair for everyone. Help must be targeted at those people who need it the most.
“However, we need to ensure consumers are incentivised to prioritise their energy bills so costs do not fall disproportionately on those who do pay. All consumers need to be confident that they are paying a fair price for the energy they use.”
Ofgem’s proposals included trials to change how energy accounts are handled when people move homes.
Currently, accounts are switched to “occupier” status until the new resident registers with a supplier, allowing bills to accumulate under unnamed accounts.
In some cases, this debt is never paid and is instead written off, becoming part of the debt allowance that is included in everyone’s bills.
Ofgem stated that this type of debt accounts for approximately one-third of the total outstanding in the system. The new proposals aim to limit the build-up of such debts while protecting vulnerable consumers.
Other changes being announced later this year include a new “Know your Rights” document, clearly setting out what support energy suppliers must provide to struggling households.
Mr Brearley will also urge energy companies to recognise the “show of faith” consumers are making through their investment in the infrastructure that delivers energy across the country, allowing Britain to benefit from its growing renewable capacity.
He is expected to say: “We know why we are making these investments, for stability now and to bring bills down over time, but this can’t be done at any cost.
“We know we must strike the right balance, ensuring a credible and compelling overall package that allows the necessary investments to be made at a cost that is fair to consumers.
“Throughout this, consumers need to have confidence that these investments – funded via their energy bills – are being managed properly. They need to see that in the way they are treated, consulted and engaged when work is taking place in their areas, the services they receive, and the choice the market can offer.
“So it remains essential that the networks deliver on time and to cost, that they are efficient, and they apply a high level of discipline to staying on track.”
Ofgem will also point to new data showing consumer satisfaction has risen to a “record-high” of 82%, while complaints to the Energy Ombudsman fell in 2024 compared with the previous year.
The regulator says these improvements lay the groundwork for continued progress toward a low-carbon, more flexible energy system that shields households from the global price shocks seen during the energy crisis.
Under current plans, the UK is committed to reaching net zero by 2050.
This means that the total greenhouse gas emissions would be equal to the emissions removed from the atmosphere, with the aim of limiting global warming and resultant climate change.