Discuss the findings of the OFGEM report with regards to the UK energy Coursework

Discuss the findings of the OFGEM report with regards to the UK energy market; and discuss if more competition between the big six UK energy firms may benefit UK consumers - Coursework Example However, the fact that consumers don’t complain about the market operations provokes thinking that the market is fair to both buyers and sellers. But this is not the case since consumers silence might be led by the inelasticity of demand. The main mandate of OFGEM is to set rules and regulations, implement them and maybe punish firms who act against customer satisfaction. With close link t the government, OFGEM ensures that energy regulatory system remains sound in that it protects consumers as well as ensuring a cost effective investment. So far, OFGEM has initiated new entrant protection plans such as regulating the big six firm’s tariff plans made to bar customers from shifting. As matter of fact, each policy that OFGEM, as it will be shown later in this essay, reduces the big firms power making the environment better for consumers and new entrants The UK energy sector is divided into three sections; energy generation, energy transportation and energy supply. The three sectors are open and allow other firms to enter. However, the six firms tend to combat the market making it hard for new entrants. As matter of fact, government does not produce energy in UK, neither does it control price. Therefore, the quantity of energy supplied barely depends on market forces and so does the price. The existence of several suppliers gives the buyer an opportunity to choose where to buy from. The big six offer many options for customers to choose from. There are also independent suppliers. As noted earlier, prices are higher than the competitive market price, and increase more than the cost of production. The price of gas and electricity showed an increasing trend between 2007 and 2013, and is expected to rise higher by 2020 if not regulated. This increment signifies a rise in supplier’s power to raise prices and hence, a prove that the market is not a competitive market structure (Sloman and Garratt 2013). Moreover, firms in the generation