Decarbonisation a ‘massive, massive challenge’, says Ofgem chair-elect

Mark McAllister was appearing before MPs on the Energy Security and Net Zero Committee (David Jones/PA)
Mark McAllister was appearing before MPs on the Energy Security and Net Zero Committee (David Jones/PA)

The chair-elect of Ofgem has described decarbonisation as a “massive, massive challenge” as he outlined his ambitions for the role in front of MPs ahead of his appointment.

Mark McAllister also told the Energy Security and Net Zero Committee that retaining a resilient and secure energy system in the face of extreme weather “is going to be very difficult”.

Mr McAllister, who is heading to Ofgem after chairing the nuclear regulator and previously founded two oil and gas companies, Fairfield Energy and Acorn Oil & Gas, said: “I’ve probably first heard the term ‘trilemma’ – that three-fold challenge of price, security and the drive towards decarbonisation – about 15 years ago.

“And if you think about from then to now, that three-fold challenge has not got any easier – in fact, it’s got a lot more difficult hasn’t it.

“It’s not just maintaining affordable energy prices, we’ve got to restore affordable energy prices and then maintain them.

“Trying to retain a resilient energy structure and security of supply in the face of even more extreme weather patterns is going to be very difficult.

“And the build-out to decarbonisation is a massive, massive challenge.”

Asked what he anticipated would be “difficult conversations” with Ofgem chief executive Jonathan Brearley, Mr McAllister replied: “A strong public body has a deep technical knowledge, is independent and has a good corporate memory. But the problem with Ofgem at the moment is that the turnover is so high, both the corporate memory gets eroded and the technical knowledge gets diluted.

“And I really want to press Jonathan and the team on making sure that we are working as hard as we can to get the best organisational capability within Ofgem, and part of that will be morale as well.”

Referring to Ofgem’s work in addressing the prepayment meter installation scandal in recent months, Mr McAllister said he would look at “are those adequate and are they being policed properly”.

And pressed on Ofgem’s role, he added: “Ofgem’s rating with the public and the industry’s rating with the public is uncomfortably low and has deteriorated.

“I want to see, over the next few years, both of those numbers rising, not through any fancy ad campaigns but through, actually, that customer service has been a lot better.”