On 22 April, the Department for Energy Security and Net Zero set out plans to recast Ofgem as a regulator with wider consumer protection powers, in what the department described as the first major update to the body’s scope since its creation in 2000. The package is intended to give households faster redress when suppliers fall short and to widen Ofgem’s ability to police parts of the energy market that have sat outside full regulation. The change is not limited to a single enforcement measure. It amounts to a broader reset of regulatory purpose, with ministers seeking to focus Ofgem more tightly on economic regulation and consumer protection while also equipping it to step into new areas of the market where customers currently have limited cover.
According to DESNZ, the most immediate change for consumers is a plan to let Ofgem enforce consumer law directly. At present, the department said, the regulator may need to go through a lengthy court process before customers receive what they are owed after unfair treatment. The new approach is meant to shorten that route and bring compensation or other redress closer to the point at which the failure occurs. That sits alongside separate work on compensation standards. The government has already proposed fairer and easier access to compensation for consumers who are let down, while Ofgem is reviewing the supplier Guaranteed Standards of Performance, which currently require automatic payments of £40 when minimum service standards are missed.
DESNZ also wants senior management incentives brought into the enforcement frame. Under the package announced on 22 April, Ofgem would be able to ban bonuses for energy executives where rules are broken. The measure is designed to change boardroom behaviour by attaching personal financial consequences to compliance failures, rather than relying only on firm-level penalties after the event. For suppliers, the signal is straightforward. Governance, complaints handling, customer service controls and record-keeping would move closer to the centre of regulatory scrutiny. For households, the practical effect would be a regulator with more scope to act before poor practice becomes entrenched.
One of the more significant features of the review is the attempt to widen regulatory cover as the market becomes more complex. DESNZ said consumers now buy a broader mix of products and services, with growing numbers using arrangements that are subject to little or no regulation. The reforms are intended to let Ofgem move into new areas where protection is missing. The government pointed in particular to heating oil customers, who have been exposed to price shocks linked to the conflict in the Middle East. Ministers announced over £50 million in March 2026 for low-income households reliant on heating oil and said the Ofgem changes are another step towards a stronger protection regime for that part of the market.
The institutional design is also being adjusted. Ofgem’s remit is to be streamlined so that its main work sits with economic regulation and consumer protection, while oversight of home upgrade schemes is moved into government through the Warm Homes Agency. DESNZ argued that this should leave the regulator better placed to focus on electricity networks, market reform and the consumer side of the shift towards cleaner power. The review also reaches into how Ofgem works internally. The department said the regulator’s technical expertise will be strengthened, its use of data improved and its approach to risk reassessed so decisions can be taken more quickly. A workforce plan and stronger board-level oversight of skills and organisational culture are also part of the package.
Official reaction followed a consistent line. Energy Secretary Ed Miliband presented the reforms as a tougher settlement for suppliers, while Energy Consumers Minister Martin McCluskey framed them as a fair-deal measure for households facing continued pressure on energy affordability. Interim Ofgem chief executive Tim Jarvis said the regulator needed powers that match a more electrified and flexible energy system. External responses were broadly supportive, though not unqualified. Citizens Advice said stronger enforcement should be matched by advocacy, trusted advice and quick dispute resolution so consumers are not left out of pocket when problems arise. Laura Sandy, chair of the Energy Network Innovation Taskforce and Green Alliance, backed the clearer remit and the emphasis on organisational culture, arguing that delivery will depend as much on regulatory practice as on formal powers.
The announcement sits within a wider government effort to stabilise the retail market and reduce exposure to fossil fuel price shocks. DESNZ said earlier reforms have helped drive customer satisfaction with suppliers to record highs, citing Ofgem data, and pointed to a 7 per cent fall in the price cap at the start of April 2026, which it said would support households until the end of June 2026. On 21 April 2026, Ed Miliband also set out further plans to accelerate clean power in response to continued global energy volatility. The policy direction is now clear: quicker consumer redress, a broader regulatory perimeter and sharper executive accountability. The next test will be delivery. The government and Ofgem must now turn the announcement into enforceable change while avoiding fresh gaps between fully regulated suppliers and the less regulated parts of the market that ministers say they want to bring within closer supervision.