Since launching its 2008 energy supply probe, Ofgem has produced a series of ‘remedies’ aimed at trying to fix what it sees as an uncompetitive retail gas and electricity supply market.
Throughout all this Ofgem has argued that it must overcome the lack of competition in the market that exists because of the Big Six’s dominance.
At the heart of this approach is the claim that such dominance is largely down to the Big Six being vertically integrated: owning and controlling both generation assets and retail businesses.
Its latest announcement, requiring these companies to offer their generation volume (up to 30%) to the market via trading platforms as opposed to opaque bilateral negotiation, will provide much needed transparency to the wholesale energy markets.
Analysis: No short-term fixes to Britain's energy angst