LONDON (Reuters) -British energy regulator Ofgem on Friday launched proposals to better protect consumers and to ensure energy suppliers are more resilient to market shocks, after soaring prices forced many smaller providers out of business.
The watchdog’s plans include introducing capital adequacy requirements, with Ofgem seeking feedback on the proposals it hopes to publish in Spring 2023.
It said it would also make suppliers ringfence the money they needed to buy renewable energy and it would stamp out the misuse of customers’ credit balances.
Ofgem’s chief executive, Jonathan Brearley, said the energy crisis, caused by soaring wholesale gas prices this year, had profoundly impacted the sector and its business models.
“These proposals will provide protections, checks and balances for consumers, suppliers and the entire sector to create a more stable market,” he said.
(Reporting by Pushkala Aripaka in Bengaluru and Paul Sandle in London; Editing by Savio D’Souza)