April 2022 Industry Newsletter

Welcome to the Corona Energy Industry Newsletter.

At Corona Energy we believe in putting the Customer first.  We use our position as one of the largest non-domestic energy suppliers in the UK to voice your needs, views and concerns at key regulatory meetings. This can involve 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 our Customers.

Monthly Roundup

What has been going on in the last few weeks?

• Ofgem’s Microbusiness Strategic Review and the Alternative Dispute Resolution (ADR) Service: Following on from the announcement of policy outcomes from Ofgem’s Microbusiness Strategic Review, work has continued on the ADR Scheme. The energy Ombudsman has opened registration for its ADR Scheme on 26 April 2022. As the new Supply License Conditions require Suppliers to only work with Brokers who are signed up to an accredited ADR scheme, this is a high priority area that we will continue to monitor and engage in. Further details on the scheme can be found here.

Gas

• 2022/2023 UIG Table Approval: Following the UNC Committee Meeting on 21 April 2022, the 2022/2023 UIG allocation tables have been approved. Although Corona Energy and our trade association ICoSS do not agree with the tables, quirks of the governance process mean that an alternative set of tables must be presented at the meeting with unanimous approval to implement any changes. As the 2021/2022 AUGE process proved, this is not an efficient route – which is why we launched our UIG Modification and review group. Further details on the new UIG allocation tables can be found here.
• Corona Energy Sponsored UIG Modifications: Following approval at the October UNC Panel meeting, Corona Energy’s Modifications 0781R – Review of the Unidentified Gas process continues to develop with good engagement at Working Group, and we have formally withdrawn 0782 – Creation of Independent AUGE Assurer (IAA) role.
• The 0781R  Working Group is continuing to assess the models for future UIG regimes, with the expectation of reducing this down to a maximum of three recommendations for inclusion in the Work Group Report. We expect this work to be finalised and the group concluded by early summer. . Once the review group concludes, any UNC party will be able to review the analysis and propose a UNC Modification to continue the work. We will continue to keep you updated of the progress.
• Following in-depth bilateral discussions with Xoserve, they have agreed to implement an internal audit utilising one of their independent auditor partners to address the concerns raised which resulted in Modification 0782. We are comfortable that this approach will achieve the desired outcomes of 0782 and will be quicker, more cost effective and with less resource burden to the industry. We are proud of this achievement and appreciate that Xoserve listened to industry and consumer concerns and worked with Corona Energy to grant more transparency to the UIG and AUGE processes.

Electricity

• Mandatory Half-Hourly Settlement (MHHS) Programme Delay: When the MHHS programme was initiated, it was confirmed that Supplier input would be minimal until such a time as the Switching Programme was complete. However, due to various delays in the Switching Programme, key Supplier input for impact assessment of MHHS processes and documentation is lacking. As a result, Corona Energy raised a change to delay Supplier input requirements in the MHHS Programme to November 2022. Although our request garnered support from other suppliers, Ofgem chose to delay until July 2022.. We will continue to work with Ofgem and Elexon and engage on this programme alongside working on the Switching Programme.

What is the Market-Wide Half-Hourly Settlement Programme?

The Market-Wide Half-Hourly Settlement Programme is being touted as “one of the biggest changes to energy markets since retail competition was introduced in the late 1990s”. It seeks to implement half-hourly electricity settlement throughout the entire electricity market. This will improve balancing accuracy, customer bill accuracy and save a projected total of circa £1.5-£4.5bn.

What does this mean?

The MHHS programme is primarily a ‘behind the scenes’ change, and seeks to realise some of the key benefits of the Smart metering rollout. This means that our customers are likely to see little change on the surface, however if you decide to have a Smart Meter installed then you may see the benefit of more accurate billing and a reduction in industry costs, such as those relating to electricity balancing.

Energy Regulation Horizon for 2022/2023

As you may be aware, 2022/2023 is set to be another year of major reform in the world of energy. We have compiled the Top 4 items to watch out for this year.

1. Market-Wide Half Hourly Settlement
   This industry project run by Elexon and Ofgem seeks to utilise the output of smart metering (half-hourly consumption data) to input more accurate data into Settlements in order to reduce reliance on forecasting. The estimated benefit of this project is c.£1.5-£4.5bn. The implementation of Market-Wide Half Hourly Settlement is expected in late 2024.
2. Code Governance Reform
   The framework of the UK’s Energy rulebooks, called Industry Codes, is currently going through huge reform with the development of the Retail Energy Code (REC). The REC seeks to take complex industry processes from various industry codes and bring them together into a single, dual fuel code. This will make a more transparent repository of these key processes.  In this reform, it is likely that Supplier obligations will change which might have an impact on our Customers. We will keep you informed if this is the case.
3. Ofgem’s Targeted Charging Review (TCR)
   Ofgem are currently undertaking a Targeted Charging Review. This looks at how Networks apply their charging methodologies. The review relates to the complex world of Network charging arrangements that are passed through to consumers via their Supplier. Tariffs and groupings have now been finalised by the networks and we will keep you updated of the changes when these are implemented.
4. Demand and Microgeneration Management
   Demand Side Response (DSR) and peer-to-peer trading means that we are heading towards a world where you can purchase your energy from your peers. These are people in your local area of the grid who are generating energy with small turbines or solar panels. Currently, theexisting networks and associated regulations in the UK need to be updated to align with new technology and innovation but it is interesting to see what opportunities could be used in the future. If you are interested in DSR, we have articles on Battery Storage and the future of the network on our website.

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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