Ofgem restructures to meet challenge of climate change

At the centre of the restructure is the creation of a new business unit, Ofgem E-Serve, which has been set up to respond to the rapid growth of climate change programmes and offshore transmission.

Ofgem E-Serve will focus on administering environmental programmes and the delivery of sustainability projects, such as offshore wind, smart meters, the proposed carbon capture and storage levy, and feed-in tariffs.

Ofgem E-serve will manage a projected £3.9 billion of current environmental schemes, and as a result of the restructure, Ofgem aims to increase its role in helping Britain to cut carbon emissions by 34 per cent by 2020.

Ed Miliband, the Secretary of State for Energy and Climate Change, first announced the expansion of the core remit of Ofgem, to encompass climate change and energy security as well as competition, earlier this year. Now details of the reorganisation have been made public, with Ofgem emphasising that its role in monitoring prices had not been compromised.

“While the changes will not dilute Ofgem’s number one priority of protecting consumers, they will enable Ofgem to fulfill an increasing role in the delivery of the radical changes needed in the energy industry to meet Britain’s emissions targets,” it said in a statement. U

A spokesperson for the Ofgem group said that sustainability and the creation of electricity networks capable of supporting renewable energy are the key themes of the reorganisation.

The business unit within the group acting as the industry regulator will continue to be known as Ofgem, and will operating alongside Ofgem E-serve.

More specifically Ofgem's restructure will enable it to ensure Britain’s high-voltage networks can meet the challenge of connecting more renewable generation. Going forward, Ofgem will place greater emphasis on ensuring regional electricity networks take a more active role in tackling climate change.

A vote of confidence in Ofgem E-Serve’s ability to run environmental programmes has been delivered by the Department of Energy and Climate Change (DECC), which has given the organisation a key role in the introduction of smart meters to Britain’s 26 million homes and in setting up feed-in tariffs for microgeneration.

Meanwhile, Friends of the Earth's Energy campaigner Robin Webster, also gave guarded support: “Ofgem has a crucially important role to play in the development of a low carbon economy – so some of these changes to its remit are very welcome.”

However, Mr Webster went on to point out: “Even though […] Ed Miliband has stressed that cutting carbon emissions would be a principal objective for the UK's energy regulator, Ofgem has indicated that tackling climate change is still not a number one priority.”

Meanwhile, Ofgem’s Group chief executive Alistair Buchanan, said: “Energy customers are concerned about climate change as well as the cost of energy [...] Now with the creation of Ofgem E-Serve and the restructuring of Ofgem we can play an even greater role in helping to deliver Britain’s emission targets.”