New Year’s Resolution – Improve the Protections Given to Vulnerable Consumers

Ofgem published its final Consumer Vulnerability Strategy (CVS) in October, setting out how it plans to tackle vulnerability in the energy market. While the CVS covers the time period up until 2025 the regulator gives us an idea of what to expect in the first year of the strategy in its “Immediate Areas for Focus”.

Looking back, we can see that Ofgem was not kidding about the ‘immediate’ part. The regulator has already consulted on its proposals to try and reduce the number of people, and the impact of, self-disconnecting and self-rationing energy. Alongside this there were proposals to introduce the Ability to Pay principles into the licence. These focus particularly on identification of customers who have self-disconnected, but also on monitoring customers who are at risk of self-disconnection or self-rationing. They go on to propose requirements on suppliers to offer emergency and friendly credit, as well as requiring suppliers to work out the most appropriate ways for individual customers to manage payment arrangements and have all the necessary information available to them.

2020 is now here though, and to fulfil the cliché, a new year brings new opportunities for the regulator. Here’s a little flavor of what we might expect from Ofgem’s vulnerability team in the next few months.

Update the consumer archetypes

The regulator uses 12 consumer archetypes as a part of its distribution impact tool to allow for a granular look at the average consumption levels of different groups of consumers. However, having been created in 2012, they could be considered to be a little out of date. Ofgem has already stated that it is working with an external partner to update the archetypes, wanting them to be “effective and used in a standard approach for assessing distributional impact across Ofgem”. Updating them will help reflect the emergence of new data and produce a more representative model of today’s society.

Proposals for the future energy retail market

The price cap will come to an end at the latest by the end of 2023. In a post-price cap world Ofgem needs to be certain that there are sufficient protections in place to support vulnerable customers. BEIS and Ofgem have already consulted on a proposed vision for the future of the retail market and how they can be “flexible and responsive”. We wait with bated breath as to what decision will be made on this, but Ofgem has put its stake in the ground here, saying that it will further consider future protection for vulnerable consumers – although given the regulator’s stance on customer protection this is not especially surprising.

Network companies to adhere to a vulnerability principle

As a part of RIIO-GD2, Ofgem intends to introduce a new, principles-based licence obligation which would require the Gas Distribution Networks (GDNs) to support consumers in vulnerable situations as part of business as usual. Ofgem has said that this it will make GDNs more accountable for the minimum service they provide consumers in vulnerable situations, while providing scope for innovation. In short, Ofgem intends to introduce a Standards of Conduct into the Gas Distribution Licence. This would require GDNs to work with charities and councils as well as ensuring that their actions result in consumers in vulnerable situations being treated fairly, and that the GDNs’ actions result in good outcomes for their consumers in vulnerable situations. The plan, Ofgem has stated, is to develop this licence obligation through its future RIIO-GD2 licence drafting working group.

The CVS identifies that the regulator has clear goals for the next year on how it wants to improve the protections given to vulnerable consumers. We will be discussing the latest developments in consumer protections at our Vulnerability Viewpoint forum later this month. For more information contact Vicky Simonds on

You may also be interested in…

Report | Weekly Customer Impact Reports

Service | Energy Supplier Compliance

Forum | Vulnerability Viewpoint Forum

Service | Connected Homes Insight Service

Related thinking

Energy storage and flexibility

Waiting to connect: the problems and solutions for network connection queues (Part 2)

Network connection queues continue to be a notable topic of interest as many generators face significant delays to project development – an issue that is directly conflicting with net zero ambitions and recent focuses on strengthening domestic energy supplies. In Part 1 of our two-part series on connection queues we...

Home supply and services

Addressing consumer harms in the non-domestic market

In recent months, Ofgem has shone a light on areas across both the domestic and non-domestic market where suppliers could improve their practices for customers and go beyond what they are obligated to do in the licence conditions. In a time of significant and extended volatility, the regulator has brought...

Energy storage and flexibility

Waiting to connect: the problems and solutions for network connection queues

The number of grid applications has risen significantly in recent years, resulting in increased pressure on the electricity networks to facilitate new connections. In its Energy Security Strategy, the UK government set out ambitions for 95% of electricity to be sourced from low carbon generation by 2030, and for the...

Energy Market Design

Are prices going to rise in Contracts for Difference Allocation Round 5?

A number of factors may be about to put an end to the trend for falling energy prices in the Contracts For Difference (CfD) scheme. The CfD scheme has provided strong subsidy support whilst also providing consumers robust levels of protection. High investor confidence and steady reductions in capital costs...

Business supply and services

What happened in 2022 in the energy market?

The GB energy market never stands still and 2022 was no different. In this infographic, we look back at some key happenings from the past year in different segments of the GB energy market.  Click the image below to see our snapshot.

Business supply and services

Terms and conditions apply: Ofgem looking further into business market

As turbulence has continued in the wholesale energy markets throughout 2022, including through the crucial October contracting round for the business supply market, non-domestic energy suppliers have come under considerable pressure. Firstly, they have had to attempt to pass through extraordinary price increases to customers in recent months, particularly if...

Energy storage and flexibility

Energy Market Bulletin: 2022 Review of Power and Gas

2022 has positioned itself firmly as one of the most memorable for the energy sector in recent years. We have witnessed seismic changes in the wholesale cost of energy, transformational proposals for market reform and two new Prime Ministers. In our last Energy Market Bulletin report of 2022, we have...

Energy storage and flexibility

Balancing Reserve: ESO proposes new regulating reserve service

In recent months National Grid ESO has been developing a new reserve service to improve the management of the system and enable the grid to accommodate zero carbon operation of the electricity system by 2025. On 28 September the ESO first announced at their Autumn 2022 Markets Forum, a proposal...