It’s a particularly difficult and uncertain time for so many businesses, and the current energy market conditions make it even harder.
To bring you the latest updates in the energy market right now, SSE Energy Solutions is working with SSE’s regulatory and government policy experts. If you haven’t already, you can read the previous policy and regulation update here.
You can read the full newsletter update, or we’ve summarised some key points below.
Smart meters remain at the heart of the transition to net zero
In January 2022, new regulatory framework was introduced which means suppliers must hit individual installation targets. Since then, 54,670 smart and advanced meters were installed in smaller non-domestic sites by large energy suppliers. This means that at the end of Q2 2022, 48% of the non-domestic market had a working smart or AMR meter.
Consultation on the working draft of the Market-wide Half Hourly Settlement programme is now underway
Market-wide Half Hourly Settlement (MHHS) is expected to deliver a range of consumer benefits. Ofgem thinks it will help suppliers make the most out of ‘time of use’ products to encourage consumers to be more flexible with their consumption. The consultation is designed to seek industry feedback on the working draft, with a view implement MHHS as early as possible and preferably no later than October 2025.
Significant changes to network charges (DUoS, TNUoS and BSUoS) are being considered
Ofgem is currently considering a number of substantial changes to network charges (DUoS, TNUoS, BSUoS). These changes include several adjustments and improvements to the way customers interact with the energy they use.
For a more detailed update on the possible changes to network charges, read the full newsletter here.
Ofgem publishes open letter in response to ESO review of the balancing market
The Electricity System Operator, National Grid ESO, plays a key role in managing system balance between supply and demand to maintain a secure supply of electricity.
Towards the end of 2021, the balancing costs were double from the previous year. In response to this increase, the ESO completed a review which concluded that there was no clear evidence that market participants’ behaviour was inconsistent with the rules. However, they recognised that changes to these rules could help to minimise these costs going forward.
Ofgem’s own investigation highlighted some instances of ‘immoderate’ behaviour and proposed a number of short-term reforms as a result.
Policy allowances relating to EU energy and certificate imports are ending
Payments to electricity generators – supported by the Contracts for Difference scheme and the Feed-in Tariffs scheme – are based on an energy supplier’s share of the electricity market. Previously, suppliers could request exemption from these costs if they could demonstrate they supplied renewable electricity that had been generated in the EU.