February 2023 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 Energy Security and Net Zero (DESNZ) 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

• Department for Business, Energy and Industrial Strategy (BEIS) Reformed into Department for Energy Security and Net Zero (DESNZ): Following Prime Minister Rishi Sunak’s ‘mini reshuffle’ of the cabinet, BEIS has been split up with the new Department for Energy Security and Net Zero (DESNZ) being responsible for addressing the issues currently faced by the energy market, as well as being responsible for achieving the UK’s net zero goals.
• Ofgem Consultation on Guidance for Third Party Intermediary (TPI) Alternative Dispute Resolution (ADR) Scheme Criteria: Following the conclusion of Ofgem’s Microbusiness Strategic Review, a licence requirement was introduced requiring Suppliers to only work with TPIs who have signed up to a Qualifying Dispute Settlement Scheme (QDSS). Until now, the Energy Ombudsman was the only scheme provider; however other schemes are currently being developed. Where Ofgem state that they do not have the vires to accredit any schemes and it is up to Suppliers to decide which scheme to work with in order to fulfil their licence obligations, Ofgem have concerns that this may lead to a reduction in quality for TPI related complaints resolution pathways. In an attempt to mitigate this risk, Ofgem are consulting on a document detailing the minimum requirements for any ADR Scheme. Further details on the consultation and draft guidance can be found here.
• The Non-Domestic Alternative Fuel Payment Scheme (NDAFP): Details of the NDAFP can be found later in this newsletter. To provide some financial aid to non-Domestic customers, the government has announced the NDAFP scheme which seeks to provide support to customers who are not connected to the gas grid and use an alternative fuel to heat their premesis. Eligible customers will receive a payment of £150 against their electricity account, and further information, including who is eligible, can be found here. We have also updated the FAQ page on our website with the relevant details here.
• The Energy Bill Relief Scheme (EBRS) and the Energy Bill Discount Scheme (EBDS): The government has recently announced that the EBRS will be ending on the 31 March 2023 and will be replaced with the EBDS, which will run from 01 April 2023 until 31 March 2024. The specifics of the EBDS are still being considered and you can find more information about the schemes on the government’s website here. We have also included details of the EBRS and EBDS schemes in the FAQ section of our website here. If you have any questions regarding these schemes, please contact us on 0800 804 8589. 

Gas

• Reform of Gas Demand Side Response (DSR) Arrangements: Following feedback from both industry and Ofgem regarding their use of the UNC Urgent Modification process in order to implement the required changes for their gas DSR product  (UNC 0822 – Reform of Gas Demand Side Response Arrangements (Urgent) and UNC 0833 (Urgent) – Enabling Demand Side Response (DSR) Market Offers to be made by Non-Trading System Transactions), National Gas Transmission (previously called National Grid Gas) have raised a UNC Review Group to discuss and explore possibilities to create a robust gas DSR product: UNC 0835R – Review of Gas Demand Side Response Arrangements. Corona Energy support this much more transparent and inclusive approach to engagement and will continue to monitor any changes developing out of this Review group.
• Unidentified Gas (UIG) Modifications: Following the closure of Corona Energy’s Modification UNC 0781R – Review of the Unidentified Gas process, Modification UNC 0831 – Allocation of LDZ UIG to Shippers Based on a Straight Throughput Method has been raised by SSE seeking to introduce a uniform allocation of UIG, where a set UIG value is 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 Modification is being discussed at Workgroup with some discussions being held around the specifics of the proposed legal text, however there seems to be general support for the concept. We will keep you up to date as the Modification progresses. 

The Non-Domestic Alternative Fuel Payment (NDAFP) Scheme

The NDAFP is a scheme set up to provide financial aid to non-Domestic customers who are off the gas grid and utilise an alternative fuel source to heat their premesis, with each eligible metering point receiving £150 against their electricity account to offset the cost of heating their premesis. The NDAFP is part of a suite of schemes to aid non-Domestic energy consumers with their energy costs due to the volatile market that we are currently experiencing, alongside other schemes such as EBRS and EBDS. Suppliers have been working with DESNZ to ensure that the eligible metering points have been identified and will be receiving the payment.

What does this mean?

The good news here is that if you are identified as an eligible customer, you will automatically receive the £150 payment (per metering point) from your Supplier. The DESNZ eligibility criteria has been defined as:

• Must be non-Domestic;
• Must be off-gas grid by postcode;
• Must have an active, energised electricity meter; and
• Must have a meter reading above zero electricity use within the past 12 months from 09 January 2022.

The £150 payment will be allocated to eligible accounts by 10 March 2023.

Energy Regulation Horizon for 2023/2024

As you may be aware, 2023/2024 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 following the development of the Retail Energy Code (REC) and the forward-looking plan to implement Ofgem as the industry’s Strategic Body.  In these reforms, 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.

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.