28 Apr 2023
April 2023 Industry Newsletter
Welcome to the April 2023 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 Energy Security and Net Zero (DESNZ) 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.
What has been going on in the last few weeks?
Gas and Electricity
- Ofgem and Retail Energy Code (REC) Third Party Intermediary Code of Practice (TPICoP): Following the conclusion of Ofgem’s Microbusiness Strategic Review and two REC workshops for Suppliers and TPIs about how to best govern this area, the REC have announced their intention to implement a mandatory TPICoP by 01 October 2023. It is expected that the TPICoP will sit under REC governance and include provisions such as standardised LOAs, TPI performance assurance regimes and a push for increased transparency. No drafting has been released as of yet, however you can find further details on the REC’s work plan here.
- The Non-Domestic Alternative Fuel Payment Scheme (NDAFP): To provide some financial aid to non-Domestic customers, the government has implemented the NDAFP scheme, which seeks to provide support to customers who are not connected to the gas grid and use an alternative fuel to heat their premises. Eligible customers will now have received a payment of £150 against their electricity account, and further information, including who is eligible, can be found here. We have also updated the FAQ page on our website with the relevant details here. The Department for Energy Security and Net Zero (DESNZ) have confirmed that any eligible customers who have not received the NDAFP payment can apply directly for the payment, further details of which can be found here.
- Reform of Gas Demand Side Response (DSR) Arrangements: Following feedback from both industry and Ofgem regarding their use of the UNC Urgent Modification process in order to implement the required changes for their gas DSR product (UNC 0822 – Reform of Gas Demand Side Response Arrangements (Urgent) and UNC 0833 (Urgent) – Enabling Demand Side Response (DSR) Market Offers to be made by Non-Trading System Transactions), National Gas Transmission (NGT)(previously called National Grid Gas) have raised a UNC Review Group to discuss and explore possibilities to create a robust gas DSR product: UNC 0835R – Review of Gas Demand Side Response Arrangements. The latest news from the Review Group is that NGT have raised two new Modifications: UNC 0844 – Enabling Direct Contractual Arrangements with Consumers for Demand Side Response aims to enable NGT to contract directly with consumers for the voluntary reduction of gas demand, and UNC 045 – Enhancements to Demand Side Response (DSR) Arrangements including a D-5 Product aims to extend existing Gas DSR eligibility and increase the lead-time for any Gas DSR curtailment to 5 days. We will continue to keep you updated of these developments.
- Unidentified Gas (UIG) Modifications: Following the closure of Corona Energy’s Modification UNC 0781R – Review of the Unidentified Gas process, Modification UNC 0831 – Allocation of LDZ UIG to Shippers Based on a Straight Throughput Method has been raised by SSE seeking to introduce a uniform allocation of UIG, where a set UIG value is applied evenly to all meters. This approach removes volatility and commercial challenges to the Allocation of Unidentified Gas Expert (AUGE) allocation table annually. It will also save money as an AUGE would not be required, and will create more transparent and easy to understand methodology. The Modification is being discussed at Workgroup with some Workgroup members being concerned that the Modification development is being distracted by considering consequential impacts of the CDSP AGUE contract which is outside the vires of the UNC. The proposer has agreed to take this point away for consideration before coming back to the next meeting with an updated Modification Proposal.
- An alternative Modification UNC 0831A – Allocation of LDZ UIG to Shippers (Class 3 and 4) Based on a Straight Throughput Method has been raised by Brook Green Trading, aiming to encourage movement to Daily Metering, reduce levels of UIG and discourages risk premiums by removing Product Classes 1 and 2 from the uniform allocation of UIG as these classes provide accurate daily meter readings. UNC 0831A will continue to develop alongside UNC 0831 and we will keep you updated with the progress of these Modifications.
- Due to the heavy workload of the UNC’s Distribution Workgroup, UNC 0831/0831A will next be reviewed on 03 May 2023 – so we will provide the next update in our May 2023 newsletter.
What is the Secure Data Exchange Portal (SDEP)?
The SDEP is a fully encrypted portal utilised by energy Suppliers to share secure communications between each other relating to customer issues. This includes opening and closing reads, erroneous transfers (where a meter has transferred to a supplier in error) and other consumer related matters. Utilising this portal, hosted on the ECOES (Electricity Central Online Enquiry Service) platform, ensures that customer related data is fully encrypted and secured end-to-end.
What does this mean?
The SDEP does not impact our customers in any way as it is a system that is essentially ‘behind the scenes’. However, the existence of the portal and the regulatory requirements mandating that all energy Suppliers utilise the portal for any matters relating to sharing consumer data between Suppliers means that you can be comfortable that your data is securely encrypted and cannot be intercepted by any third party.
The SDEP means that your data is safe, secure and treated with the highest levels of protection.
Energy Regulation Horizon for 2023/2024
As you may be aware, 2023/2024 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.
- 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.
- Code Governance Reform
The framework of the UK’s Energy rulebooks, called Industry Codes, is currently going through huge reform following the development of the Retail Energy Code (REC) and the forward-looking plan to implement Ofgem as the industry’s Strategic Body. In these reforms, 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.
- 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.
- 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, the existing 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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