Part of Ofgem's role is to ensure that Britain's energy wholesale and supply markets are competitive.
The wholesale markets are where energy suppliers purchase gas and electricity for their customers. More than half of domestic bills and a quarter of business customers’ bills are made up of wholesale energy costs.
Ofgem monitors prices paid by customers for energy in the retail supply markets and produces regular reports on competition in the retail sector, covering customer switching and other indicators.
Increasingly Britain is becoming part of Europe's gas and electricity market and the competitiveness of the GB market depends greatly on what strides forward European countries can make in opening up their own markets to competition. Ofgem is a strong supporter of the European Commission's drive to liberalise European Union energy markets and members of Ofgem's markets team have been seconded to support the Commission's work.
The markets team is active in formulating environmental policy to help deliver Ofgem's sustainable development objectives. This includes working to remove the barriers to household electricity generation - so called microgeneration - and to pave the way for widespread introduction of smart metering – meters that include technology to enable householders to control their consumption.
Ofgem has looked carefully at the potential for more advanced meters to encourage energy efficiency and reduce carbon emissions. This work will continue with the first extensive trials of smart metering in Britain which Ofgem will administer. The trials are being funded by the Government.