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

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 - Assignment Example as proposed a number of reforms that should be employed in order to make the market more transparent, functional, and effective and consumer oriented in nature. The main objective for this essay is to study the report prepared and published by the OFGEM about the United Kingdom energy sector and analyze the proposals and reforms suggested by the same. This would be done by evaluating the economic aspects of this sector like the market structure, the price and demand elasticity, the present condition of the sector, the entry barriers and common strategies, the areas of the sector that need immediate interference and change and the propose reforms as suggested by the OFGEM. The UK energy sector is an intensely concentrated market in which the Big Six energy suppliers control the way the market functions. Also, the pricing strategies of one of these companies tend to affect that of the other companies in a direct and significant manner. The consumer groups for this market have been identified to have low involvement and low level of trust since the influence of the customers have become restrained due to the less number of options available to them. The low degree of consumer engagement has stemmed from a number of factors like the intrinsic nature of the energy products, the long periods required for switching suppliers, the excessive influence of the energy suppliers on the market and the lack of proper government interference and regulations for monitoring and supporting the interests of the consumer groups. These factors are identified to be hazardous for the future sustainability and health of the market structure because a significant lack of comp etition among the enmities in the market, a lack of interest and engagement of the consumers and excessive control of a handful of energy suppliers are noted in this sector. Other data given in Appendices 1-5 are suggestive of the above identified factors and features of this sector. The Herfindahl-Hirschman Index