November 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 (EBRS) 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 in the media. The scheme seeks to reduce the wholesale market costs of non-Domestic energy bills in order to provide relief to customers subjected to the higher wholesale energy costs as a result of a number of external factors. The legislation has passed through parliament and we have contacted our customers regarding their eligibility for the scheme.  Further details on the legislation can be found here, and Corona Energy has provided a guide to the scheme on the FAQ section of our website here.
• Ofgem’s Microbusiness Strategic Review and the Alternative Dispute Resolution (ADR) Service: The energy Ombudsman’s ADR scheme will be going live on 01 December 2022, with engagement in the run up to implementation still ongoing. Over one thousand five hundred Third Parties are now signed up to the scheme, and further details can be found here.

Gas

• Unidentified Gas (UIG) Modifications: Following the closure of Corona Energy’s Modifications 0781R – Review of the Unidentified Gas process, Modification 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 has already passed Panel and has been initially discussed at the November Distribution Workgroup. We will continue to provide updates as to how this Modification progresses.

Uniform Network Code (UNC) Modification Panel

The UNC Modification Panel, often shortened to UNC Panel, is the group that decides on a number of matters regarding the UNC change process for the gas market. Although the responsibilities of the group are quite wide, they essentially decide what Modifications progress through the change process. They are responsible for deciding whether UNC Modification related consultations are issued and at the end of the change process whether a Modification should be implemented) or if a Modification should be recommended to Ofgem for approval. Their decision to implement or send to Ofgem for approval is based on whether or not the Modification is considered material.

The UNC Modification Panel is comprised of:

• Six Gas Shipper representatives;
• Six Gas Transporter representatives;
• One Domestic Consumer representative;
• One non-Domestic Consumer representative;
• One Independent Suppliers’ representative (non-voting and currently vacant);
• One iGT UNC representative (non-voting);
• One Central Data Service Provider (CDSP) representative (non-voting); and
• One Ofgem representative (non-voting)

Each of the Shipper and Transporter representatives are elected by constituency vote and hold their position for two years.

What does this mean?

Although the UNC Modification Panel does not impact our customers directly, it is a key part of the UNC Modification process and represents a point of intervention and validation at key decision points in the gas industry. It is highly important that those sitting on the Panel represent their constituencies (e.g. Shippers and Transporters) rather than their individual companies, and that they act and make decisions based on the betterment of their constituencies and the gas industry as a whole. The decisions that the UNC Modification Panel impacts both industry processes and industry participants and it is highly important that there is confidence in its proceedings.

If you want to read more about the UNC Modification Panel and see who currently sits on the Panel, you can read more here.

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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