May 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

• Ofgem’s Microbusiness Strategic Review and the Alternative Dispute Resolution (ADR) Service: Following on from the announcement of policy outcomes of  Ofgem’s Microbusiness Strategic Review, work has continued on the ADR Scheme. The energy Ombudsman has opened registration for its ADR Scheme on 26 April 2022. As the new Supply License Conditions apply to a wide range of Third Parties, we would suggest that both our Broker and Framework partners assess whether the new conditions apply to them. Further details on the scheme 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 is drawing to a close, with the Work Group Report due for consideration at the June UNC Panel meeting. There was general Work Group consensus that a ‘vanilla smear’ approach to UIG would be preferable, with a set UIG value being applied evenly to all meters uniformly – removing volatility and commercial challenges to the Allocation of Unidentified Gas Expert (AUGE) allocation table annually. This approach will save money as an AUGE would not be required, and will create more transparent and easy to understand  methodology. We are expecting a UNC Modification to be raised to introduce this UIG approach following the publication of the Work Group Report.

The Switching Programme: Revisited

We provided an overview of Ofgem’s Switching Programme in our September 2019 Newsletter, and with the upcoming implementation of the programme we thought it prudent to revisit these ambitious changes to the Change of Supplier process.

The Switching Programme is the name of the Ofgem-lead project seeking to reduce the timescale for Change of Supplier events. This is a large-scale project that will fundamentally change the key infrastructure of the UK Energy Market and increase the speed of switching to a different energy Supplier.

What does this mean?

The Switching Programme’s changes are going live in July 2022, and during the implementation period (otherwise known as the ‘Cutover period’) some Change of Supplier processes will be interrupted. If you are due to be changing supplier over this period, we will have been in touch to let you know that there will be a slight delay. Most of the changes which make up the Switching Programme are ‘behind the scenes’, so there will likely be little impact to our end-user Customers.

As noted in our September 2019 Newsletter, due to the nature of the non-Domestic energy market we aren’t expecting to see many impacts as a result of the Switching Programme as the use of fixed-term contracts means that Change of Supplier events are planned much further in advance when compared to the Domestic energy market. However, if you have any questions on the Switching Programme, please get in touch.

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, theexisting 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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