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Strong, independent, regulator is crucial

DECC has published the conclusions of two reviews that aim to support the delivery of energy and climate change goals by strengthening the way regulation is carried out in the gas and electricity markets, and improving delivery of DECC programmes.

The Ofgem Review proposes new legislation for government to set high-level strategic goals that the energy regulator will play a part in meeting. DECC’s Delivery Review will result in increased accountability and help maximise value for money for the delivery of DECC programmes.

Energy and Climate Change Secretary Chris Huhne said: “A strong, independent regulator will be crucial to building the secure, affordable, low-carbon energy we need. Long-term certainty is vital too. We are proposing to set clear goals which Ofgem must play its part in meeting, so that industry and consumers know the rules of the game.

“Today we are also reshaping how our delivery bodies work for us, to ensure more accountability and maximum value for money.”

Ofgem’s Chairman, Lord Mogg, welcoming the findings of the review, said: “The emphasis DECC’s review places on the value of a strong, independent regulator is welcome. It underlines how important to investors a stable and predictable regulatory framework is to ensure that the £30 billion of investment for Britain’s energy networks is delivered in the decade ahead.

“Consumers too need confidence in the energy market. Our Retail Market Review will provide still more assurance that protecting their interests is Ofgem’s core role.”

Regulating independently of Government, Ofgem will set out annually how it plans to deliver its contribution to the goals and how it will monitor progress, providing greater transparency and accountability to the public.

The Delivery Review outlines a number of measures to help ensure DECC is able to respond to the future delivery challenge, including focusing delivery of energy efficiency objectives through the Green Deal, competitively tendering where possible the services that will underpin it.

Following the end of core grant funding for the Energy Saving Trust and Carbon Trust from 2012/13, DECC expects both organisations to compete for those services put out to tender and continue to develop other commercial opportunities. A new Office of National Energy Efficiency will be established within DECC to provide a wider energy efficiency strategy, strong programme management, and a cohesive view of DECC’s customer facing policies.