Ofgem has fired the starting gun on a major shake-up of how Britain’s energy market is regulated.

The regulator wants a simpler system that cuts red tape and boosts customer satisfaction.

The plan centres on outcomes-based regulation. This flips the focus from prescriptive rules to whether customers actually get a good result.

Suppliers will be judged on the quality of every interaction. Ofgem says they must deliver outcomes that are fair, fast and reliable for households and businesses.

The model sets broad goals rather than telling suppliers exactly how to meet them. Ofgem says this unlocks flexibility while keeping core standards tight.

Good outcomes include complaints being handled “fairly, promptly, and through channels that suit the customer”. Another is giving customers confidence that service and technology “will work reliably and efficiently”.

The regulator says the rulebook has become too bulky. Suppliers and consumer groups warned that the volume of requirements now blocks innovation.

Tim Jarvis, Director General, Markets at Ofgem, said: “Average customer satisfaction in the energy sector is at a record high.” He added: “We need to ensure our regulatory framework is fit for the future – one that embraces competition, enables innovation, and supports growth while protecting consumers.”

Jarvis said Ofgem will work with industry to “introduce greater use of outcomes-based regulation and explore more effective Guaranteed Standards of Performance”. He said the aim is to “drive innovation and deliver consistently better results for energy consumers”.

He added: “Our goal is to strike the right balance: protecting consumers while reducing the regulatory burden on suppliers.”

Alongside this Ofgem has launched its biggest review of Guaranteed Standards since 2015. These rules set minimum performance levels and trigger £40 automatic compensation when suppliers fall short.

The regulator says the energy system has changed dramatically in the last decade. It wants to know if these standards still fit a modern market.

Ofgem is also weighing whether Guaranteed Standards could replace some prescriptive licence rules. It believes this could tighten accountability without adding complexity.

The work is part of its Consumer Confidence Programme. The goal is five-star service and renewed trust in the industry.

Ofgem says the next step is feedback from suppliers and consumer groups. The regulator wants a clear framework that delivers the best outcomes for every customer.