Gemserv is pleased to have responded to the recent BEIS and Ofgem consultation on Energy Code Reform.
Gemserv has a long history of providing code management services in relation to both electricity and gas supply, having supported the Master Registration Agreement since its inception, and currently providing code management services for the Smart Energy Code, Retail Energy Code and IGT-UNC.
We welcome that further progress is being made in overhauling the energy codes landscape to enable the transition to a clean energy system and to reach net zero. We strongly support the BEIS/Ofgem reform objectives for a code framework that will:
- be forward-looking, in line with net zero goals and benefit existing and future consumers
- accommodate a growing number of market participants and ensure compliance
- be agile and responsive to change
- make it easier for any market participant to understand the rules
This July 2021 consultation proposes options for a new institutional governance framework and the associated implementation plans. In summary, we support Option 1, which proposes Ofgem as a strategic body with separate licenced code managers, selected by competitive tender. We welcome that the BEIS/Ofgem consultation has addressed many of the themes that we outlined in our thought leadership paper published in March 2021, where we proposed several no-regrets initiatives that could commence in the short and medium term to help deliver the Net Zero policy goals.
We are strongly supportive of the need for code governance reform so that it can be fit for purpose to meet the future challenges of a Net Zero energy sector. The Net Zero energy transition will drive a dramatic change in both the energy mix and in the numbers and types of market participants, with customers becoming increasingly more active in energy markets.
We would highlight the following from our response:
- Scope of reform – we support that the scope of reform should include a) all existing industry codes plus engineering standards, and b) all delivery roles including those performed by the FSO, Xoserve, Elexon, DCC, and Electralink.
- Strategic direction – we agree the BEIS/Ofgem preferred model that Ofgem should be the designated strategic body and should licence Code Managers.
- Code Manager selection – we urge that all code management and delivery functions should be competitively tendered, and performance incentivised.
- Implementation – we support code consolidation as part of drafting new licences and competitive tenders. We consider that merging gas and electricity codes should be a priority.
Finally, we would urge that early decisions are made on progressing Code Governance reform to achieve the expected benefits.