The energy regulator has launched a review of its licensing regime for power suppliers.

Ofgem said it wanted to ensure that “appropriate protections are in place against poor customer service and financial instability”.

The watchdog said the current system had “helped boost competition in the energy market, giving consumers looking for a better deal more suppliers than ever before to choose from”.

The review is part of Ofgem’s forward work programme, which was outlined in March.

Consultation later this year

Ofgem plans to consult on the findings from its review during the late summer.

The review will include the mechanisms for scrutinising companies that want to become energy suppliers.

It will also probe the safeguards in place if suppliers collapse.

> See Ofgem's statement