WIREDGOV

The OFT today announced a market study into the supply of energy to consumers who are not connected to the main gas grid.

The study will look at whether the market is working for 'off-grid' energy consumers who use sources such as heating oil, LPG and, more recently, renewable energy sources like solar panels.

The OFT has brought forward its study into this market, which was in its draft 2011/12 work programme, following discussions with the Department of Energy and Climate Change (DECC) to allow time to consider any recommendations before next winter and in light of increasing public concern about aspects of the market.

The OFT is now consulting on the scope of the study which it proposes should cover the whole of the UK and consider a number of themes including:

• how well competition provides choice for consumers at a local and regional level
• whether the terms and conditions of supply provide consumers with clear information, competitive prices and fair terms and conditions
• the experience of customers: the OFT proposes to survey the views of off-grid energy users around the UK.

Heather Clayton, OFT Senior Director of Infrastructure, said:

'Two and a half million people rely on off-grid energy and it is vital that the markets that supply them function as well as they possibly can.

'We will be taking both competition and consumer issues into account through this comprehensive look at the market.'

A number of other bodies, such as Ofgem, the Scottish Government, the Welsh Assembly Government, the Northern Ireland Executive, the Department for Business, Innovation and Skills, DECC, the Department for the Environment, Food and Rural Affairs and Trading Standards, are all interested in various aspects of this important market for consumers. The OFT will be working closely and collaboratively with these and other relevant parties to ensure that any concerns raised are addressed by the organisation best suited to do so. 

Key parties who wish to comment or make a submission on the scope should write by 28 February to: Off-grid Energy Market Study, Office of Fair Trading, Level 2, Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX or email offgrid@oft.gsi.gov.uk.

The OFT expects to confirm the scope of the study in March and conclude it in Autumn 2011.

NOTES

1. The proposed scope of the market study and further Q&A are available from the market study page.
2. OFT market studies are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.
3. Market studies involve an analysis of a particular market with the aim of identifying and addressing any aspects of market failure from competition issues to consumer detriment and the effect of government regulations. Possible results of market studies include enforcement action by the OFT; a reference of the market to the Competition Commission; recommendations for changes in laws and regulations; recommendations to regulators, self-regulatory bodies and others to consider changes to their rules; recommendations to business; campaigns to promote consumer education and awareness; or a clean bill of health.