Describing the watchdog as a multi-billion pound “clearing house” for money funding various energy schemes, Alistair Buchanan, its chief executive, said fraud was a “huge issue”. “Fraud and money laundering are permanent concerns for our internal auditors, Deloittes (sic), when they are looking at all of our projects,” he said. “The sheer scale of numbers that are coming in and out of Ofgem as a clearing house, it’s nearly £3bn, [mean] it is a very major concern.”
In addition to its regulatory responsibilities, Ofgem runs various schemes for the Government, which impose costs on energy suppliers – and so ultimately, the consumer. The figure Mr Buchanan cited covers the cost of social, environmental and energy efficiency schemes. Ofgem also runs a competitive tender process to build and maintain the offshore cables which connect wind farms, worth around another £2bn.