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March 2022 Industry Newsletter

News

Welcome to the March 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.

Monthly Roundup

What has been going on in the last few weeks?

Gas and Electricity

  • Ofgem’s Microbusiness Strategic Review: As reported on last year, Ofgem have been working on their Microbusiness Strategic Review. The review aims to introduce a number of protections and benefits for Microbusiness customers in the energy market. Following feedback from their statutory consultation from July 2021, Ofgem have issued their decision on the proposals with the following being the main items:
    • Introduction of a Third Party Intermediary Alternative Dispute Resolution (TPI ADR) scheme.
    • Increased visibility and disclosure of TPI costs.
    • Removal of the requirement for Microbusiness customers to submit a termination notice.
  • Further details can be found here.

Gas

  • Corona Energy Sponsored UIG Modifications: Following approval at the October UNC Panel meeting, Corona Energy’s Modifications 0781R – Review of the Unidentified Gas process and 0782 – Creation of Independent AUGE Assurer (IAA) role continue to develop with good engagement at Working Group.
    • The 0781R  Working Group is assessing the various UIG models being proposed, with a view to refining the proposal to a maximum of three models
    • The 0782 Working Group has been presented with an option from Xoserve where their existing accredited auditor would undertake a role seemingly similar to the IAA as part of the Central Data Services Provider contract. As a result, Corona Energy will meet with Xoserve prior to the next Working Group to discuss how this could work. We will continue to keep you updated of the latest developments for these modifications.

Electricity

  • Mandatory Half-Hourly Settlement (MHHS) Programme Delay: In the early days of the MHHS Programme, 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 has raised a change to push back Supplier input requirements in the MHHS Programme to November 2022. The Switching Programme will have  completed implementation prior to this date and Suppliers will  have greater resource available to impact assess the MHHS processes and documentation. The consultation phase for our change has now completed, and we will let you know the outcome of our request.

What is a Special Administration Regime?

You may have heard the term ‘Special Administration Regime’ or ‘SAR’ discussed throughout the industry over the last few months.

A Special Administration Regime (SAR)in the energy industry, is a scheme in which the government appoint an administrator to run an energy Supplier when the usual Supplier of Last Resort (SoLR) process is unable to be used.

A Supplier failure may not result in a SoLR for a number of reasons, for example, where a failing Supplier is so large that another Supplier cannot take on its customers effectively.

What does this mean?

A Supplier entering into a SAR would continue to operate normally from a Customer’s perspective. Customers would continue to receive their gas and electricity supplies, be billed by the Supplier and use all the usual methods to get in touch with their Supplier to solve any issues with their account.

Behind the scenes, the Supplier will be run by the appointed administrator, with the funding to continue trading being provided by the government via taxpayer money. This arrangement will continue until the Supplier is either rescued (via commercial means such as restructuring), sold or has its customers transferred to other Suppliers via the usual SoLR process.

Energy Regulation Horizon for 2022

As you may be aware, 2022 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 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 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. This 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.
  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 peers are people in your local area of the grid who are generating with small turbines or solar panels. Whilst this cannot currently be utilised within the UK due to existing networks and associated regulations needing to catch up with innovations, but this will open up many opportunities 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.

Copyright Statement: All content within the Corona Energy newsletter are the property of Corona Energy unless otherwise stated. All rights reserved. No part of the newsletters may be reproduced, transmitted or copied in any form or by any means without the prior written consent of Corona Energy.

About the Writer


This newsletter was written by Dan Fittock, Corona Energy’s Regulation and Compliance Manager. If you have any questions about the content of this newsletter you can contact Dan by clicking the button below.

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