One in, one out: Code Consolidation SCR opens as TCR draws to a close

The number of Significant Code Reviews (SCRs) that Ofgem is progressing shows little sign of diminishing with the launch of the new Retail Code Consolidation SCR on 29 November. This came barely a week after Ofgem’s decision on its Targeted Charging Review (TCR) and, since this has not yet formally closed, it means the regulator is now running no fewer than five SCRs.

The Retail Code Consolidation SCR is the programme under which Ofgem plans to amalgamate the Master Registration Agreement (MRA) and Supply Point Administration Agreement (SPAA) into the new Retail Energy Code (REC), which will allow a reduction in the number of industry codes from 12 to a still-considerable 10. It is therefore intrinsically linked with the Switching Programme, and hence one of the topics covered in the latest edition of our Faster Switching Service. In addition, the scope of the SCR also includes moving the Smart Meter Installation Code of Practice, Green Deal Arrangements, Priority Services Register, theft provisions and other metering codes of practice into the REC, with knock-on impacts on other codes including the Balancing & Settlement Code and Distribution Connection & Use of System Agreement. A distinct hurdle will be aligning the electricity and gas industry processes involved, which result in a lot of duplication.

The end result should be a rationalisation of retail-focused codes and Ofgem plans for this to be completed in early 2021, in advance of the new switching arrangements going live on 1 July that year. However, it will not be an easy task given the scale and complexity of industry codes, and the fairly limited number of people in the industry who fully understand them. BEIS and Ofgem are currently running a joint review into the future of codes and the only real consensus is that there should be a reduction in the number of codes. Full rationalisation and simplification of all codes will be an enormous exercise, so it is very important that consolidation of the retail codes – which are perhaps an easier starting point compared to balancing, settlement and network operation – is seen to be a success.

One step the REC is looking to take towards is the creation of a single market data catalogue, which is currently subject to consultation as part of the REC Technical Specification. This is intended to list all the data items sent and received between all market participants, not just suppliers, but also third parties like metering agents and price comparison websites. Ofgem said this would be a single digital platform for the industry, in line with Energy Data Task Force Recommendations to improve overall market efficiency. Metadata held in the existing catalogues will be migrated over to new registers in the REC, eliminating duplication but seeking to preserve how the information is held.

We cover the development of the REC and new switching arrangements in our quarterly Faster Switching Service, which provides a guide to the programme and the expectations on participants. For more information, contact Steven Britton at s.britton@cornwall-insight.com or on 01603 542126.

You may also be interested in…

Chart of the Week | I want to break free – Ofgem’s Collective Switch results

Service | Energy Supplier Compliance Portal

Related thinking

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...

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...

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...

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...

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...

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...

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...

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...

This site is registered on wpml.org as a development site.