The Government has published the Draft Legislation on Energy which addresses smart metering, supply and switching, and competitive tendering for onshore transmission. The aim of the new legislation is to increase competition in the energy market, reducing energy costs for consumers.

The Government has further reinforced its commitment to ensuring every supply, even those serving homes and small businesses in Great Britain will have a Smart Meter installed by the end of 2020. The draft legislation enables the Government to continue to drive the timely delivery of Smart Meters. Smart Meters provide consumers with data demonstrating their energy usage for each half hourly period providing the power to manage energy use thus reducing carbon emissions and costs.

A number of measures have been introduced in recent years to speed up the process of switching supplier including enabling Ofgem to drive reforms which expedite and simplify arrangements for customers to switch gas or electricity supplier.  However, the Competition and Markets Authority has identified that current electricity settlement arrangements limit suppliers’ incentives to encourage customers to voluntarily change the time energy is used. In order to drive a competitive market is reliant on engaged consumers to drive suppliers to innovate, improve their service and to seek to reduce their prices. The proposed powers to support the reform of electricity settlement will allow Ofgem to require suppliers to use actual half hourly electricity data in the settlement processes. This will improve accuracy of consumer bills and enhance security of supply with actual usage data being used to balance supply and demand across the National Grid.

In addition, between 25 and 40% of consumer bills are made up of the cost of transporting electricity from the place that it was generated to the customer. Extending Ofgem’s powers to enable competitive tendering for onshore electricity assets is aimed at attracting competition into the market to encourage innovation and bring significant savings to the user.

The Energy and Climate Change Committee is conducting pre-legislative scrutiny of proposals set out in the draft legislation to ensure that the proposed measures are workable, necessary, efficient and clear.

The committee has invited responses on the draft legislation with particular focus on the following questions:

  • Are the proposals in the draft legislation sufficient to achieve the Government’s stated aim of increasing competition in the energy market and reducing energy costs for consumers?
  • Are the draft legislation’s provisions necessary, workable, efficient and clear? If not, what changes need to be made?
  • Are there any relevant omissions from the draft legislation, particularly in relation to the measures on supply and switching and competitive tendering?

The Committee will publish its report in April 2016. The Department of Energy and Climate Change will then consider its recommendations and, if appropriate, reflect any changes in the final legislation. The closing date for responses is 11th February 2016.

We are formulating our response to the consultations and would welcome your feedback to incorporate into this.

To have your say, please email the compliance team at or alternatively complete the contact form. To discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.

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