26 Apr 2021
April 2021 Industry Newsletter
Welcome to the April Corona Energy Industry Newsletter.
Welcome to the newly relaunched Corona Energy Industry Newsletter.
After a challenging 2020 for everyone, we’re relaunching our regulation newsletter to keep you all informed of what’s going on in the world of energy regulation.
At Corona Energy we believe in putting the Customer first, that’s why we use our position as the third largest Non-Domestic Gas Supplier in the UK Market to voice your needs, views and concerns at key regulatory meetings, from lobbying Ofgem, The Department for Business, Energy and Industrial Strategy (BEIS) and other regulatory bodies and industry parties to ensure you are represented and treated fairly.
As part of our service to you, this monthly newsletter will keep you informed of the latest developments in the world of energy regulation in a way that is informative, easy to read and useful to you: our Customers.
What Happened During Lockdown?
The ongoing covid-19 pandemic has been tough on everyone – lockdowns and restrictions have been tough on both our domestic lives and on the economy. During this time a number of initiatives were put into place by both Ofgem as our regulator and by the various industry codes that govern how our industry operates. In an effort to show you the type of work that’s been going on ‘behind the scenes’, we would like to highlight just a few measures that were put in place to ensure the lights stayed on and the gas kept flowing in these challenging times:
- Ofgem applied a period of regulatory flexibility between April and July 2020 which reduced the burden of some regulatory requirements and allowed Suppliers to focus on their core business of supplying gas and electricity to their customers.
- Performance Assurance measures across the board were paused, suspended or eased in order to recognise that performance in various areas of the industry would not be up to usual standard.
- Urgent modifications and changes across numerous industry codes were raised in order to react to the changing energy landscape and ensure that our industry continued to work collaboratively and effectively.
We would like to say a big thank you to all key workers – from healthcare and retail to energy industry workers – who tirelessly continued to work throughout the lockdowns to keep our country running smoothly.
What has been going on in the last few weeks?
- Market-Wide Half Hourly Settlement: Ofgem have confirmed their plans for their approach to Market-Wide Half Hourly Settlement, which is due for implementation in four and a half years’ time. It is expected that the net benefit of the additional data entering into electricity settlement will be in the region of £1.5-£4.5bn. The project will be primarily progressed via Elexon, with the Design and Build phase due to start in August 2021.
- REC Performance Assurance Framework: The Retail Energy Code have released a consultation detailing their proposed approach to Performance Assurance, utilising a ‘consumer-centric’ approach to governance. The proposals include a Performance Assurance Methodology designed to understand the causes and solutions in the market, a Retail Risk Register to monitor current and evolving risks and a number or proposed Performance Assurance Techniques designed around the concepts of:
- Risk Monitoring
- Net Zero and Going Green: BEIS are reviewing the available options for the UK’s approach to Net Zero post Brexit. A call for evidence is being undertaken in an attempt to address market distortion and a lack of transparency as to where ‘green’ energy comes from. We’ll keep you updated on the latest in this area as soon as more details become available.
What is ‘ECOES’?
You may have heard the term ‘ECOES’ or ‘National Database’ being used when discussing your electricity meter with your Supplier. We’d like to break this down for you:
- The Electricity Central Online Enquiry Service or ‘ECOES’ is the name of the central industry database that holds data on each electricity meter in the UK energy market. This database holds the technical data and specifications of your meter, but does not hold any personal data or information about the customer who owns the meter. This database allows for technical data to be accessed by a new Supplier upon a Change of Supplier event and allows a Supplier to quote a contracted price correctly based on the meter details held in ECOES.
- ECOES is also a platform that allows Suppliers to communicate with each other in a fully encrypted way for a number of industry processes for both Electricity and Gas, facilitating safe and secure communications around such processes as Erroneous Transfers, Debt Assignment Protocol and many more.
What does this mean?
ECOES probably won’t impact you or your supply on a day-to-day basis, however sometimes a Supplier may fail to update ECOES with new data, such as if you have a meter exchange and the new meter’s serial number is not updated correctly on ECOES by the Supplier. This will not impact your supply in any way, however when you come to move to a different Supplier, this may cause some problems as the new Supplier’s records will not match the records on ECOES. Although details can be updated quickly in ECOES, this can cause a small delay in registering with your new Supplier.
Energy Regulation Horizon for 2021
As you’re probably aware already, 2021 is set to be another year of major reform in the world of energy. What should you be focussed on? Below we’ve complied the Top 5 to Watch this year.
- Market-Wide Half Hourly Settlement
This industry project run by Elexon and Ofgem seeks to utilise the output of smart metering, namely half-hourly consumption data, to input more accurate data into Settlements and reducing the reliance on forecasting, with an estimated benefit of £1.5-£4.5bn. Implementation of Market-Wide Half Hourly Settlement is expected in late 2024.
- Code Governance Reform
The framework of the UK’s Energy rulebooks, called Industry Codes, is going through huge reform at the moment with the development of the Retail Energy Code (REC). The REC seeks to take complex industry processes from various industry codes (The Master Registration Agreement, The Supply Point Administration Agreement, The Uniform Network Code, The Distribution Connection Use of System Agreement just to name a few) and bring them together into a single, dual fuel code to make a cleaner more transparent repository of these key processes. In this reform it is likely that Supplier obligations may change and this might have an impact on our Customers. We we’ll keep you informed if this is the case
- Ofgem’s Targeted Charging Review (TCR)
Ofgem are currently undertaking a Targeted Charging Review looking at how Networks apply their charging methodologies. This mostly deals with the complex world of Network charging arrangements which are passed through to consumers via their Supplier. Tariffs and groupings have now been finalised by the networks, but the implementation date for these changes has now been pushed back to 2022.
- Demand and Microgeneration Management
Demand Side Response (DSR) and peer-to-peer trading basically means that we’re heading towards a world where you can purchase your energy from your peers. These peers are those people in your local area of the grid who are generating – for example with a small turbine or solar panels. We’re a way off this yet with the existing networks and associated regulations needing to catch up with new innovations, but this opens up many opportunities. If you’re interested in DSR, why not check out our article on Battery Storage and the future of the network on our website? Or come and talk to us about the possibilities: we’d love to hear from you.
Disclaimer: The information provided in this newsletter is intended to be a general guide and should not be taken to be legal and/or regulatory advice. At no time will Corona Energy actually or be deemed to be providing advice and no actions taken by Corona Energy shall constitute advice to take any particular action or non-action. Whilst every effort is made to provide accurate and complete information in this newsletter, Corona Energy cannot guarantee that there will not be any errors. Corona Energy makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the newsletters and expressly disclaims liability for errors and omissions in the contents of this newsletter. Neither Corona Energy, nor its employees and contractors make any warranty, expressed or implied or statutory, including but not limited to the warranties of non-infringement of third party rights, title, and the warranties of merchantability and fitness for a particular purpose with respect to content available from the newsletters. Neither does Corona Energy assume any legal liability for any direct, indirect or any other loss or damage of any kind for the accuracy, completeness, or usefulness of any information, product, or process disclosed herein, and do not represent that use of such information, product, or process would not infringe on privately owned rights.
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