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Ofgem
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Commercial and market outlook
Ofgem outlines thinking on protecting credit balances and RO payments
This article is an extract from our Energy Spectrum publication issued on Monday 25 April. If you are interested in receiving critical policy, regulatory, market and transactional developments across the energy sector, and would like a free full sample of Energy Spectrum, please request a copy here. You only need...
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E-mobility and low carbon
Expanded guidance provides more clarity on electricity supply to EVs
In a burgeoning EV-centric world, Ofgem’s updated guidance on supplying electricity to electric vehicles (EV) should provide clarity for many organisations around the supply arrangements in place for different charging scenarios. Due to their mobile nature, EVs don’t fit in with the legislative model that defines an electricity consumer by...
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Regulation and policy
Safety first: UNC modification addresses Ofgem’s concerns over derogations
On 21 January, Ofgem announced that it was rejecting a modification that would have introduced the concept of derogations into the gas Uniform Network Code (UNC). Since then, a new proposal has been raised, with the intention of addressing the regulator’s concerns around safety aspects and the approval process. Derogations...
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Regulation and policy
New obligations for gas suppliers under the GGL
The Green Gas Support Scheme (GGSS) was launched on 30 November 2021, which aims to financially support producers of biomethane through anaerobic digestion. The scheme will be funded through the Green Gas levy (GGL), by placing an obligation on all fossil fuel gas suppliers, with the exception of those that...
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Business supply and services
Wake-up call: Cost pressure in the GB energy market
This Energy Perspective was published in Issue 791 of Energy Spectrum on 10 January 2022. The current crises afflicting the energy supply sector, driven by rising energy input costs, are of economy-wide concern. The price of energy has always been an issue of significance for national economic competitiveness, inflation, monetary...
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Home supply and services
The risks of short-term interventions distorting long-term incentives in the energy market
Christmas 2021 was not a time of cheer for the energy industry and its customers. There is acute stress on energy suppliers and consumers from current bills - let alone where they may move to in the coming year. And it seems the political and regulatory debate has moved on...
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Business supply and services
With great power comes great responsibility – what can be done for customers and suppliers in these challenging times?
Given that the situation in the wholesale markets shows no signs of abating, both the government and Ofgem have a shared responsibility for helping to steward the energy sector through a period of profound challenges for suppliers as well as for their customers. Furthermore, the risk of structural damage to...
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Commercial and market outlook
Price cap set for 46% rise for Summer 2022, Winter 2022-23 cap may exceed £2,000
Due to market volatility, world events and Ofgem's new methodology, our price cap prediction has changed. Please see the latest predictions via our blogs page here Updated price cap figures here Following further highs in wholesale prices and the costs associated with the raft of supplier failures seen in the...
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Power and gas networks
New Fault Ride Through compliance arrangements introduced for transmission-connected generators
Ofgem approved Workgroup Alternative Grid Code Modification 1 (WAGCM1) of GC0151 Grid Code Compliance with Fault Ride Through (FRT) Requirements on 5 November. In short, this decision introduces a new, legal process, into the Grid Code – the legal text that governs those connecting to the electricity transmission system -...
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Power and gas networks
Location, location: The increasing complexity of embedded benefits
There is growing recognition of the need to reform our current network arrangements to support a more dynamic and flexible electricity system as we undergo the transition to net zero. Among the network elements currently going through a period of review are Distribution Use of System (DUoS) charges, which recover...
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Regulation and policy
Just the bill please – who picks up the costs of market exits?
This article is an extract from our Energy Spectrum Nutwood. find out more about a subscription to Energy Spectrum here. Between 9 August 2021 and 19 November 2021, 22 energy suppliers exited the market impacting more than 2mn mainly domestic customers. Supplier exits result in a number of costs being...
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Regulation and policy
Keeping an eye on compliance
In response to the rising wholesale energy prices, Ofgem published a letter on 29 October setting out the steps that it is taking to protect the short- and long-term interests of consumers. In addition to its intention to consult this month on the current price cap methodology, Ofgem set out...
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Heat networks
Heat and buildings strategy: Key points
On 19 October, the government released the Heat and Buildings strategy outlining how the government will tackle the decarbonisation of the built environment to help meet the UK net zero ambition. Our experts have taken a quick look at the strategy and highlighted the key points. Heating The strategy makes...
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Home supply and services
Shaken, not stirred: The fate of the supply market
This Energy market perspective was taken from our Energy Spectrum publication on 4 October 2021. To find out more about a free trial to Energy Spectrum, find out more here or contact Robert on r.buckley@cornwall-insight.com. As we enter the winter 2021-22 trading season, the energy supply market remains in intense...
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Home supply and services
Rocketing energy prices and failing suppliers—what is happening?
Sky high gas prices and energy suppliers going out of business have been key headlines in the news over recent weeks, but what is actually happening? Through the COVID-19 pandemic we saw much lower gas prices, which have been surging upwards since the spring and risen rapidly through the summer, a time...
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Home supply and services
The default tariff cap and the law of unintended consequences
With all eyes on the immediate challenges facing the energy supply market and the impact of the default tariff cap as a contributing factor, it is important to note that the cap for the coming winter period should not be considered in isolation and that attention will swiftly turn to...
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Home supply and services
Consolidation in the energy market predicted to continue
It has been a turbulent time for the retail energy market, experiencing a period of consolidation with mergers and supplier exits. This supplier consolidation is expected to continue in the near term. If suppliers fail to shift their business models for the new world it is likely to continue, according...
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Home supply and services
“Green” tariffs in the spotlight as BEIS commences review
With the announcement on 16 August of a call for evidence on Designing a Framework for Transparency of Carbon Content in Energy Products, consultant Josephine Lord looks at the issues being considered and what the future may hold for so-called “green” tariffs. The call for evidence is the first step...
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Regulation and policy
How will consumers take to Market-wide Half Hourly Settlement?
Ofgem published its decision to implement the move to Market-wide Half Hourly Settlement (MHHS) on 20 April. This confirms plans to move to new settlement arrangements over a four and a half year time period, with the Elexon-led Design Working Group’s Target Operating Model to be used as the blueprint. Meters...
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Regulation and policy
Ofgem raises modifications ahead of RCC and new switching arrangements
The latest edition of our Faster Switching Service Report due to be issued this week includes the latest developments in Ofgem’s Switching Programme and the associated Retail Energy Code (REC). Launched in November 2019, the Retail Code Consolidation (RCC) Significant Code Review (SCR) set out Ofgem’s intention to amalgamate the...
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Regulation and policy
Calm before the storm? 2021 energy supplier compliance developments
The latest update to our Energy Supplier Compliance Portal went live on 4 May and includes changes to the compliance landscape during February to April 2021. While the previous quarter’s update reflected new principles resulting from Ofgem’s Supplier Licensing Review (SLR) and protections for prepayment meter customers facing self-disconnection, Q121...
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Regulation and policy
Electricity transmission charging reform – overtaken by changing priorities?
Charging for the transmission network is never out of the development process for long. From major reviews, such as that initiated under Project Transmit in 2010, to significant reforms such as removing the triad benefit from distributed generation in 2018, and a host of smaller developments, change seems the only...
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Commercial and market outlook
April showers bring DUoS for every half hour
Almost two years ago, Ofgem approved DCP268 DUoS Charging Using HH Settlement Data, which will move existing non-Half Hourly (NHH) settled demand customers onto time-based Half Hourly (HH) Distribution Use of System (DUoS) unit rate charges. With the modification to be implemented in the DCUSA on 1 April, we revisit...
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Low carbon generation
New transmission charge forecast will help generators managing cost uncertainty and volatility
Transmission network use of system (TNUoS) charges represent a significant proportion of operating costs for many renewables generators, often exceeding 50% of annual running costs. For some, as recently highlighted by SSE in a recent report and to Members of the Scottish Parliament, they could present a barrier to investment in generation...
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Business supply and services
Energy suppliers must be ready to demonstrate compliance with new principles
From 22 January, energy suppliers were required to follow new principles resulting from Ofgem’s Supplier Licensing Review (SLR), which initially kicked off nearly three years ago. Such was the breadth of the SLR, changes were introduced in two rounds, with the first round of changes bringing the introduction of tougher...
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Regulation and policy
Ofgem “hands-on” in RIIO-2 as net zero route unfolds
During the next round of the RIIO price controls, Ofgem can be expected to take a more hands-on approach to outputs the networks are required to provide and the allowed revenues they can charge their users or consumers. This will have impacts for network development including the enabling of electric...
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Commercial and market outlook
A look back at 2020 part 4
As we take our first steps into 2021, we take our final look back at the biggest developments in the UK energy markets in 2020, setting us up for the significant year ahead. Ofgem issued its decarbonisation Action Plan on 3 February as Jonathan Brearley became Ofgem CEO, setting out...
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Business supply and services
A look back at 2020 part 3
As we take our first steps into 2021, we continue to look back at the biggest developments in the UK energy markets in 2020, setting us up for the significant year ahead. The mergers and exits from the supply market that were seen in 2019 continued into 2020 and led...
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Regulation and policy
Ofgem’s Network Access and Forward Looking Charges review – should I be interested
Spoiler – if you are a distribution connected generator, yes, In a big way Ofgem is currently progressing one of its biggest overhauls of network charging; with the Targeted Charging Review having only recently concluded that is quite a statement. We have already seen the value to distribution connected generators...
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Regulation and policy
What will the introduction of the Retail Energy Code mean for metering companies?
Ofgem has proposed that certain metering companies will need to become full parties to the new dual fuel Retail Energy Code (REC). What will this mean in practice? Metering Equipment Managers (MEMs) is a term introduced for the REC, encompassing electricity Meter Operator Agents (commonly termed MOPs) and gas Meter...
