CRA Insights

New regulatory paradigms for the UK retail energy market

December 23, 2020
Electric meters

Over the past 10 years, the UK retail energy regulatory debate has focussed on making competition more effective by removing barriers to greater consumer engagement.

Although the number of companies competing in the market has increased, as has the number of customers switching providers, there remains a significant segment of consumers who do not engage with the market. This resulted in the introduction of a price cap for retail customers in January 2019.

In this paper, we discuss how the existing regulatory framework—which has focussed on switching and transparency of retail energy markets—might be affected by the changing relationship between energy suppliers and consumers. Three aspects of the emerging marketplace will need attention to ensure that its benefits extend to as many retail energy consumers as possible:

  • Transparency will decrease and the scope for anticompetitive behaviour could increase as products become more complex and, possibly, bundled together;
  • Consumer commitments may lengthen and affect switching; and
  • Communication and marketing could become more prone to neglecting the interests of vulnerable or disengaged consumers.

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