On 22 April 2026, the Department for Energy Security and Net Zero (DESNZ) announced proposals to “transform” Ofgem’s role and powers to strengthen protections for energy consumers. While much of the detail is still to follow, the announcement highlighted three areas where Ofgem’s remit could be materially expanded. Each has clear parallels with developments elsewhere.

Direct enforcement of consumer law

First, DESNZ proposes giving Ofgem stronger powers to enforce consumer law directly. This reflects a broader shift in UK consumer regulation towards quicker, more administrative enforcement tools.

There are obvious links here to the Competition and Markets Authority’s expanded consumer enforcement powers and its increasing activity in this space (see our thoughts on recent developments here).

Historically, Ofgem has relied heavily on licence conditions to take enforcement action against regulated entities. Stronger consumer law powers could allow it to act more directly in parts of the market where licensing powers are currently limited. Over time, it will be interesting to see whether this leads to a greater shift towards consumer law enforcement, or whether licence‑based enforcement remains the primary tool.

The Law Commission’s recent announcement on a potential consumer class action regime may also be relevant, particularly in shaping the balance between regulatory enforcement and private redress mechanisms.

Banning executive bonuses

The second key proposal is for Ofgem to be able to ban energy company executive bonuses, with a blueprint provided by the recently adopted approach in the water sector under the Water (Special Measures) Act 2025 (W(SM)Act). The suggestion is that individual accountability is the only way to ensure company behaviour is aligned with consumer interests, and appears to follow from other steps taken by Ofgem in relation to fitness of senior staff in the sector.

If the water sector blueprint is followed, a number of key design questions will need to be answered about the regime. The energy sector is significantly more diverse than water, raising issues about which types of breach would trigger a bonus ban, how seriousness would be assessed, and whether the rules would apply uniformly across all regulated entities and activities.

It is also worth noting that the water regime included a degree of retrospective effect, applying from the start of the relevant financial year in which the rules were introduced – that is, April 2024 when the W(SM)Act received Royal Assent in 2025. Whether DESNZ and Ofgem would consider there is a case to push for a similar anti‑avoidance measure in energy will need to be closely watched.

A broader and more flexible remit

Finally, DESNZ points to reforms enabling Ofgem to regulate new areas of the market where needed, with a renewed focus on economic and consumer protection across all energy consumers.

This sits alongside recent developments, including the introduction of statutory regulation for heat networks and the ongoing creation of a regulatory framework for third‑party intermediaries. What remains unclear is how far this flexibility will extend, and how quickly Ofgem could intervene as new business models emerge.

Looking ahead

Together, these proposals signal a regulator with stronger enforcement tools, greater reach, and a clearer consumer‑focused mandate. The impact, however, will ultimately depend on how these powers are framed — particularly in relation to overlap with other regulators, proportionality across a diverse sector, and safeguards against unintended consequences.