September 2022 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

• Energy Bill Relief Scheme for non-Domestic Customers: We have been working closely with the Department for Business, Energy and Industrial Strategy (BEIS) behind the scenes on their Energy Bill Relief Scheme – which you have likely seen reported on in the media. This scheme seeks to lower the wholesale market costs of non-Domestic energy bills in order to provide relief to customers who have been subject to the higher wholesale energy costs as a result of a number of external factors. We’re still waiting to hear about further details, but all the information you need to know so far can be found here.

• 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. Well over 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.

Gas

• 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 in October.

National Gas Supply Emergency

A National Gas Supply Emergency (NGSE) is a situation where there is not enough gas in the pipelines to safely burn and could result in incomplete combustion taking place – which has the potential to release highly dangerous Carbon Monoxide. As a result, in instances of NGSE the UK’s domestic demand is protected as much as possible.

What does this mean?

Firstly, we would like to make it clear that an NGSE has never been declared – National Grid Gas, the organisation responsible for the day-to-day balancing of the network, have a number of tools they can use to ensure gas gets to where it needs to be well before declaring an NGSE.

If an NGSE is called, either Corona Energy, one of our service providers or National Grid Gas themselves will make contact with our customers via their Emergency Contact Details and ask them to reduce their gas demand. Who contacts the customer and whether the demand reduction is voluntary or mandatory depends on the severity of the emergency – as the NGSE process is broken down into various stages.

As part of our annual winter preparedness activities, we will be writing to our customers with guidance on the NGSE process. 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.

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.

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 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.
3. 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.
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 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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