Ofgem to expand for climate change

Ofgem, the energy regulator, has announced plans for a radical shake-up and growth in size as it prepares to deal with the burden of measures to tackle climate change.

By Rowena MasonPublished: 8:51PM BST 08 Sep 2009
It is thought that new green schemes, from smart meters to offshore wind, will balloon in cost from around 9pc to 18pc of bills in the next few years.
Experts believe this could underestimate the scale of the taxes and levies that might be set aside to ensure both energy security and tackle climate change.

It is likely that the Government will expect Ofgem to increase its supervision of whether energy companies are complying with complex taxes, schemes and rules, such as the Renewables Obligations Certificates – incentives to generate green energy.
A new unit, called Ofgem E-serve, will manage £3.9bn of current environmental schemes. Analysts said that in the future it could handle taxes on customer bills such as paying for capturing and storing carbon emissions from coal-fired plants or potential levies related to new nuclear plants.
Ed Miliband, the Secretary of State for Energy and Climate Change, decided to expand the core remit of the energy regulator earlier this year to encompass climate change and energy security as well as competition.
Ofgem emphasised that the importance of monitoring prices for consumers had not been diluted.
Alistair Buchanan, chief executive of Ofgem wrote a sternly-worded letter to power suppliers last month calling on them to explain to customers why fuel bills had not fallen in line with wholesale energy prices.
"Wholesale costs have fallen from last year's peak and look set to fall further as we head into the winter. In a strong competitive market, we would expect prices to respond to such falls," the letter said.