Energy regulator Ofgem has warned that technological changes mean the UK’s ‘supplier hub’ arrangements will no longer be appropriate as the power market develops.

The term ‘supplier hub’ refers to the fact that currently the supplier is positioned as the primary intermediary between consumers and the energy system.

In its response to last November’s call for evidence on the topic, the watchdog considered barriers to innovation, default supply arrangements for consumers that do not engage in the market, and how to protect consumers regardless of how they access their energy supply.

“Current supplier hub arrangements are not going to be fit for purpose for energy consumers over the longer term,” said Ofgem.

“There is a strong case for considering fundamental reforms to the ‘supplier hub’ model, and for evaluating how alternative arrangements might operate in practice.”

Long lead times

Ofgem does not want to wait until current reforms – such as the smart meter rollout, half-hourly settlement and faster switching programmes – are completed before introducing further changes.

The regulator is concerned that long lead times for such changes mean that it would not be prudent to wait as consumers could be put at a disadvantage.

Further details are expected in the coming months.

> Read Ofgem's response

Tags