Potential impacts for consumers following marketwide settlement reform

Market-wide electricity settlement reform will build on smart meter capabilities to help suppliers more accurately link their supply costs to consumers’ demand, encouraging them to develop new products and services that help their domestic and small non-domestic consumers shift energy use to times of the day when electricity is cheaper to generate or transport, to save on their energy bills. Increased uptake of innovative technology associated with smart products/services may also help consumers offer flexibility, playing a key role in developing a smart, flexible and decarbonised energy system.

Settlement reform, and the related changes it can help facilitate, can unlock considerable consumer benefits. Together with smart metering data, it can help enable signals which reflect the costs and benefits that users confer on the network. We are currently considering improvements to the signals sent via network access and forward-looking charging arrangements to ensure electricity networks are used efficiently and flexibly, reflecting users’ needs and allowing consumers to benefit from new technologies and services, while avoiding unnecessary costs on energy bills in general.

We want to better understand consumers’, and suppliers’, likely response to the combined signals and tariff options which may emerge following electricity settlement reform and any changes made via electricity network access and forward-looking charging reform. We are seeking input on the potential consumer impacts of these reforms, including for those in vulnerable situations, any potential mitigation or protection measures which may be needed, and the role our principles-based regulation framework could play.

Please fill-out your response in this document by 20 March COB. 

The full consultation document could be found here.

Please find the slides from the Ofgem stakeholder workshop held on 8 February on  Settlement Reform: Consumer Impacts - including Network Access/Charging issues here. 


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