Third-party intermediaries in the retail energy market: call for evidence
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Detail of outcome
Alongside this summary of responses, we are setting out how we will take forward targeted reforms aimed at making the retail market work better for consumers, become more resilient and investable, and support the transformation of our energy system.
Work to address load controllers has already been taken forward as part of the Energy Security Bill. These regulatory measures are an important step towards ensuring that the smart and flexible energy system is secure, safe and attractive for consumers to participate in.
We expect that if any changes to how third party intermediaries (TPIs) operate are to be taken forward, we would consult as part of this wider programme of retail market reform, which already includes a commitment to consult on policy options for enabling greater innovation in the retail market later in 2023.
We received 52 responses to this call for evidence, from:
- suppliers
- industry groups
- consumer groups
- bill splitter
- brokers and consultants
- price-comparison websites and auto-switchers
We have provided a summary of response to this call for evidence. Where we provided examples of good practice, a majority of respondents agreed with our approach.
Original call for evidence
Call for evidence description
This call for evidence aims to increase our understanding of how third-party intermediaries (TPIs) currently operate in the retail energy market. In the Energy White Paper the government committed to consult on regulating TPIs, with a view to ensuring the regulatory framework adequately covers the wider market. This call for evidence represents the start of that consultation process.
TPIs include a wide range of business models that typically sit between customers and the regulated entities in the energy market. TPIs are increasingly used by domestic and business customers to engage in the market. TPIs used mostly by domestic customers include price comparison websites, auto-switchers and auto-recommendation services, and bill-splitters (who may consolidate several services, including energy supply, into a single bill split amongst multiple bill-payers). Business customers use TPIs such as brokers to support with energy procurement and contract negotiation. New types of TPI are emerging across the energy system as it evolves in particular, aggregators and other organisations performing a ‘load controller’ role who can control or impact customer energy usage remotely using communication networks.
TPIs provide valuable services to customers and can support our net-zero ambitions by providing services that enable customers to engage in the retail market in a way that supports decarbonisation. However, they largely operate outside the scope of the current retail energy market regulatory framework, and we want to be confident that customers are adequately protected when using their services. We have some evidence that TPIs’ activities could lead to customer harm (or risk of harm) and energy system risks if insufficient protections are in place, but do not have a full understanding of the range of possible harms, or their frequency or severity.
We are therefore asking for evidence and views of customer harm (and/or risk of harm) from TPIs’ activities, as well as where TPIs may present energy system risks. The call for evidence sets out common themes where we are seeking views which are:
- information transparency
- contracting and sales arrangements
- customer service arrangements and wider customer protections
- out-of-court dispute resolution
- energy system risks
The call for evidence also sets out information on the existing regulatory arrangements for TPIs (including initiatives such as voluntary codes of practice) and seeks views to inform the design of any future regulatory intervention if required.
We welcome responses from a wide range of stakeholders with an interest, such as:
- price comparison websites
- auto-switchers and auto-recommendation services
- energy brokers and consultants
- bill splitters
- aggregators and other organisations performing a ‘load controller’ role.
- domestic and business customers
- licensed energy suppliers
- consumer groups and trade bodies
- academics, think-tanks and policy institutes
It may also be of interest to other licensed entities or licence-exempt entities.
The information we receive will help to inform the government’s future policy in this area.
Read the BEIS consultation privacy notice.
Please don’t send responses by post to the department at the moment as we may not be able to access them.
Documents
Updates to this page
Published 16 August 2021Last updated 24 July 2023 + show all updates
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We have published a summary of responses to this call for evidence.
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First published.