Extract A: Regulator's report into the domestic gas market

A recent market study by the energy regulator into the domestic gas sector highlighted that despite rising wholesale costs, gas remains the primary heating source for approximately 85% of households. The report revealed that consumers on Standard Variable Tariffs (SVTs) are paying an average of £250 more annually compared to those on competitive fixed-rate deals. A significant proportion of these consumers have never switched providers, demonstrating high brand loyalty or inertia.

However, the landscape is gradually shifting due to technological advancements and decarbonisation policies. The government has introduced subsidies for low-carbon alternatives under the Boiler Upgrade Scheme, accelerating the installation of domestic air-source heat pumps and biomass boilers. Additionally, modern smart hybrid heating systems and retrofitted residential insulation are lowering the baseline energy required to heat homes.

To promote market engagement and assist transition, the regulator has introduced several initiatives:

• A digital registry that allows certified competitor companies to directly offer tailored decarbonisation and fuel-switching packages to high-use households.
• Mandatory rollouts of next-generation smart gas meters to help households track real-time expenditure and identify consumption patterns.
• Targeted green subsidies and insulation grants for low-income and vulnerable households currently on prepayment gas meters.

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