30 Jul 2021
July 2021 Industry Newsletter
Welcome to the July Corona Energy Industry Newsletter.
Welcome to the Corona Energy Industry Newsletter.
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 has been going on in the last few weeks?
Gas and Electricity
- BEIS and Ofgem’s Code Governance Reform: An area that has been included in our Energy Regulation Horizon, this month BEIS and Ofgem have issued their proposals for a new governance framework for the energy industry. The proposals seek to take the “complex” and “fragmented” current arrangements and adopt a new “unified”, “flexible” and “dynamic” approach to regulation. Key to the new vision is a new strategic function, in which a new authority would be responsible for setting a clear direction for code reform and management.
- Settlement Class Change for Poor Read Submission Performance: The UNC Panel have approved modification UNC0664VVS – Transfer of Sites with Low Valid Meter Reading Submission Performance from Classes 2 and 3 into Class 4. Although we opposed this change on a number of points, the Panel majority approved. As part of our service to our customers, we strive to ensure that read submission performance is maintained so we’re hoping that this will have a limited impact. If you have any concerns around this area, please get in touch.
- Elexon Consults on Transition Arrangements for Market-Wide Half Hourly Settlement (MHHS): This month Elexon have issued a consultation on their transition arrangements for MHHS. This consultation deals with a number of areas, such as the introduction of new data items, data cleanse activities, the proposed approach for unmetered supplies (UMS) and the associated timescales for each phase of the project. Although this will not impact consumers in the short term, this project seeks to introduce half hourly settlement for the majority of the electricity market, and will have long term impacts on the metering arrangements for consumers, currently planned for around 2024. The consultation closes early on the 02 August and we will keep you up to date with the latest developments.
What is the Retail Energy Code?
You may have heard the term ‘Retail Energy Code’ or ‘REC’ being used in discussions around the industry, as well as in our very own newsletter! Although we have broken this down somewhat in our Energy Regulation Horizon, we thought we would give a little more detail:
- The Retail Energy Code or ‘REC’ is the name of a new industry code (or ‘rulebook’) that is due for implementation on 01 September 2021. The REC will take rules, regulations and processes from various other industry codes and bring them into a centralised location. As part of the REC implementation, two other industry codes will be wound down and closed: the Master Registration Agreement (MRA) for electricity, and the Supply Point Administration Agreement (SPAA) for gas.
- The REC is a new kind of industry code that relies on a Code Manager to run it on a day-to-day basis. Historically industry codes have been run by Code Administrators and require input from industry parties (such as Suppliers, Networks and Metering Agents) to aid in the development and changes to the rules and regulations. Code Managers on the other hand are afforded much more scope for development, and will have the expertise and powers under the code to undertake a lot of this work in-house.
- The REC Code Manager is actually made up of three organisations, each responsible for an area of the new code:
- The REC Professional Services provider is Gemserv
- The REC Performance Assurance provider is Deloitte
- The REC Technical Service provider is Capgemini
What does this mean?
The REC is unlikely to impact our customers on a day-to-day basis, as it is your Supplier that will have to ensure that they are compliant with the processes held within the REC. It’s also important to be aware that although the REC is a new industry code, the processes taken from the other industry codes and put into the REC are not changing at all, rather they are being relocated into a more central and easily accessed location.
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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