30 Sep 2021
September 2021 Industry Newsletter
Welcome to the September 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 one of the largest Non-Domestic Gas Suppliers in the UK 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
- Various Supplier of Last Resort (SoLR) Events: We’ve sadly seen a number of Domestic Suppliers exit the market this month, with their customers being assigned to other Suppliers in the market to protect their security of supply. The SoLR process ensures that no customers, either Domestic or non-Domestic, lose their energy supply if their Supplier ceases to trade. Further details on the SoLR process can be found here.
- UNC UIG and AUGE Related Issues: We are working with our trade association ICoSS to raise a UNC Modification to introduce an independent Allocated of Unidentified Gas Expert (AUGE) auditor role following industry concerns around the AUGE’s governance. Additionally, we are raising a request for an Unidentified Gas (UIG) review group to centralise various industry workstreams into one traceable and structured group. We will keep you updated as to the progression of these issues as they progress through the UNC Change Process.
- Gas Wholesale Prices: The words currently on everyone’s lips. Gas wholesale prices continue to remain high, leading to some issues for Domestic Suppliers subject to Ofgem’s price cap. The impacts for non-Domestic Suppliers is far less, but it does mean that any future contracts will be more expensive. Please get in touch with us if you have any questions.
- ‘Early Warning’ Power Cut Technology Trial Installed in London – UK Power Networks (UKPN) announced the installation of ‘Smart Cable Guards’ in some areas of London, designed to detect and fix power cuts before they happen. The scheme is part of UKPN’s innovation trial, with the devices created by DNV. UKPN plan to install further devices across London, Kent and Surrey.
What is the Distribution Connection and Use of System Agreement?
This one is a bit of a mouthful, but you may have heard the term ‘Distribution Connection and Use of System Agreement’ or ‘DCUSA’ being used in discussions around the industry, so we thought we would provide a little detail around this topic
The Distribution Connection Use of System Agreement or ‘DCUSA’ is the name of an industry code (or ‘rulebook’) that has been in place since 2006. The DCUSA covers process and legal arrangements between licensed electricity Distributors (who are responsible for the physical electricity network), electricity Suppliers and electricity Generators. This includes how much the Distributors charge both Generators and Suppliers for using their assets to get electricity from the power station to the meter.
What does this mean?
The DCUSA 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 DCUSA. It is, however, useful to understand the importance of the DCUSA when it comes to your electricity bill. The Charging Methodologies contained within the DCUSA agreement are used by your Supplier to calculate the cost of using the grid for getting the electricity to your meter, and applies this to your bill. Suppliers pay this amount upfront to the Distributors and pass this through to end user consumers via Supplier billing arrangements.
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 reduce 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 will 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 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 for example 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 new innovations, but this opens up many opportunities. If you are 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.
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.