31 Aug 2022
August 2022 Industry Newsletter
Welcome to the August 2022 Corona Energy 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.
What has been going on in the last few weeks?
Gas and Electricity
- Switching Programme Implementation: With only minor issues, we are happy to report that the industry-wide Switching Programme was implemented on 18 July 2022. Our customers are likely to see little change on the surface, as the majority of the impacts are ‘behind the scenes’. If you have any questions on the Switching Programme, please get in touch.
- Ofgem’s Microbusiness Strategic Review and the Alternative Dispute Resolution (ADR) Service: The energy Ombudsman are continuing their engagement with both Third Parties and Suppliers in the run up to the December 2022 implementation of their ADR Scheme. Almost one thousand Third Parties have signed up and we continue to engage bilaterally with the Ombudsman to ensure that our Customer and Third Party partner’s views are represented. As the new Supply License Conditions apply to a wide range of Third Parties, we would suggest that both our Third Party and Framework partners assess whether the new conditions apply to them. Further details on the scheme can be found here.
- National Grid Gas Emergency Preparations: You may have seen in the news that National Grid (NG) are undertaking a four-day test of their gas emergency preparedness. Although this appears to have been somewhat sensationalised, this exercise is undertaken every year to ensure that the UK’s gas infrastructure is prepared for all worst-case scenarios. This year the exercise has increased from two days to four days, however this is to ensure that all potential scenarios are included in their planning. Further details can be found in a useful NG briefing note here.
- Gas General Non-Transmission Services Commodity (NCO) Increase: Due to the increase in the wholesale gas price and higher than expected impact on shrinkage cost, National Grid have confirmed an increase the NCO charge from 0.0092p/kWh to 0.0343p/kWh from 01 October 2022. The NCO use a flat rate applied to all sites and for all kWh’s of gas consumed. We have already contacted our customers who will be impacted by the increase.
- Unidentified Gas (UIG) Modifications: Following the closure of Corona Energy’s Modifications 0781R – Review of the Unidentified Gas process, work is continuing behind the scenes on a modification to introduce a uniform allocation of UIG, where a set UIG value 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 latest news is that Ofgem have been approached and are generally open to the concept in principle, and we expect to see a draft modification raised by October.
Gas Emergency Contact Details
With the run up to winter, we have started contacting our large usage gas customers to update our gas emergency contact details. For any large gas meter (consuming more than 732,000 kWh per annum), we are required under UNC governance to provide the Gas Transporters with the name and telephone number of an individual at the site that can be contacted at any time of day or night.
We do not envisage any major issues this coming winter, and our preparedness activities form part of our annual operational and business checks to ensure that we are prepared for all circumstances.
What does this mean?
It is extremely important that this point of contact be provided to the Gas Transporters because in instances of a Gas Emergency, where the UK gas system does not have enough gas in the pipelines to operate safely, the Gas Transporters will call the emergency contact and ask them to turn down their gas usage. This will reduce demand on the network in order to protect domestic customers.
The Department for Business, Energy and Industrial Strategy (BEIS) have issued a statement detailing that they do not expect a gas emergency this winter:
“We would like to stress that we do not expect there to be a gas supply emergency in the UK. The UK is in no way dependent on Russian gas supply as imports from Russia made up less than 4% of total UK gas supply in 2021. Therefore, the Government does not expect gas shortages as a result of the war in Ukraine and the associated sanctions. We have one of the most reliable and diverse energy systems in the world, and we are in a fortunate position with access to our own North Sea gas reserves, reliable imports from partners like Norway, the second largest LNG port infrastructure in Europe, and a stable gas supply underpinned by robust contracts between companies.”
If you have a large gas meter and need to update your emergency contact details, please make contact with your Corona Energy Account Manager.
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.
- 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 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.
- 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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