Our work programmes focus on improving our services and driving positive change in the retail energy market. Currently, we’re working on programmes to reduce energy theft, improve energy switching, move to a more intelligent energy system, and simplify the metering codes of practice. You can read more about each of our programmes, and find out how to get involved, below.
Energy Theft Reduction Strategy
What is Energy Theft?
Energy theft is when gas or electricity is extracted illegally without being paid for. Usually, this involves tampering with an energy meter to stop your gas or electricity usage from being accurately recorded.
It’s hazardous to interfere with the energy supply – every year, it costs lives, causes injury, and destroys property. Damaging a gas supply can cause gas to leak into enclosed spaces, leading to explosions. Changing the wiring of a meter can make appliances live to the touch, risking shocks or burns.
As well as causing severe harm, energy theft increases the cost of gas and electricity for consumers.
We are working with the energy industry on an Energy Theft Reduction Strategy – to keep people safe and costs down.
We want to reduce the amount of energy theft in Great Britain, reducing the cost to bill-paying consumers and promoting safety. However, there currently isn’t a reliable way to measure the scale of energy theft across GB. Ofgem previously estimated the cost of energy theft at £400-500m. However, that estimate is several years old and doesn’t provide a sufficiently robust basis for investment in initiatives to reduce theft.
To establish a more recent and relevant estimate, we have commissioned an evidence-based Theft Estimation Methodology.
Developing a reliable Theft Estimation Methodology
After considering proposals from four potential service providers, we began the project in partnership with Capgemini. The study results will be shared with interested parties via a webinar on 13 December 2022 and posted on this web page.
Whilst our theft reduction strategy is on-going, we have already introduced some services, which you can access here:
Further details on the theft incentive schemes are available on the REC Portal, including guidance on submitting the reports. You can also contact the REC Code Manager at email@example.com to answer any specific questions.
Data & Digitalisation
In 2022 we started a review and cataloguing of our data sources to enable the secure opening of data and fair application of data protection regulations. This will enable us to safely broaden the access to data under the REC. This work continues in 2023 and beyond as new data items, sources and the associated uses increase.
We anticipate making changes to the REC, and the associated services, to improve access by utilising the standard REC change processes.
To enable many of the future market innovations, deliver net zero and reduce energy cost to the consumer the Energy Digitalisation Taskforce identified the need for a consumer consent portal. RECCo is well positioned to facilitate this and identify the best way forward for industry to deliver this and create a positive outcome for the consumer.
The REC Performance Assurance Framework has a key role in maintaining standards of data quality and is well placed to drive and maintain improved data standards. Where data quality is poor and is having a detriment to industry operation, RECCo will play a facilitating role to improve the quality.
Digitalisation of Services
We seek to embrace a digital first approach where sensible and we continue to make incremental improvements to the REC Portal and EMAR, as well as other services such as CSS and the enquiry services.
API Gateway & Micro Services Architecture
As technology advances, the dependence on data increases; the pace of change increases and uncertainty grows. RECCo is planning to adopt an API gateway and microservices architecture, where sensible and economic, for its services. This will provide parties with reduced complexity in access services; reduced effort in changes and increased flexibility to RECCo to procure and deliver existing and new services when they arise.
Secure Smart Energy Systems (SSES)
We understand and support the drive for Net Zero and acknowledge the estimated £10 billion in savings which demand-side response services (DSR) and energy smart appliances (ESA’s) may deliver and believe that consumer engagement and consent will be critical to the adoption of these technologies. As a result RECCo and the REC will have a key role to play in the facilitation of SSES.
Market-wide Half-hourly Settlement (MHHS)
What is the Market-wide half-hourly settlement?
Energy Settlement reconciles the difference between the energy purchased by suppliers and the amount sold to customers. Currently, whilst generators and suppliers trade electricity in the wholesale market in half-hourly periods, most customers are ‘settled’ on a non-half-hourly basis using estimates. These estimates are based on the average consumer’s usage, and the meter reads they have submitted.
As smart meters can record the amount of energy consumed within every half hour of the day, there is an opportunity to make the settlement process more accurate. MHHS will enable the industry to move to a more intelligent, flexible energy system. This will act as an enabler for innovative products, services and tariffs and more efficient management of the electricity networks. Ofgem’s analysis predicts that MHHS will bring net benefits for consumers between £1.6bn and £4.5bn over 2021-2045.
RECCo is responsible for ensuring that MHHS requirements that impact the Retail Energy Code and REC Services are delivered and that the solutions have positive outcomes for consumers.
Objectives and Scope
During this project we will:
Engage with MHHS programme governance to support design, build, testing and implementation
Update the Retail Energy Code to reflect new MHHS systems and processes
Make changes to REC Services to support the new MHHS Target Operating Model and end-to-end design
Update the REC Operational Services and Operating Model to reflect the new market arrangements
Engage with REC Stakeholders
This workstream will deliver the required changes to the REC baseline by updating the REC drafting and consulting with stakeholders and MHHS governance. We expect multiple versions of the REC drafting to be produced.
Design & Build
This workstream will deliver the required changes to REC Services. This includes the Central Switching Service (CSS), Electricity Enquiry Service (EES), Electricity Retail Data Service (ERDS) and Secure Data Exchange Service (SDES).
This workstream will ensure that required REC Services participate in appropriate MHHS test phases, mobilising and operating the necessary environments, processes, and resources to support the successful delivery of these programme milestones.
This workstream will make sure that the correct operational processes are in place. This includes supporting the update to the REC baseline and the RECCo Operating Model. Areas to update include:
Find out more
We will keep you up to date as the project progresses, and provide a monthly update via our newsletter.
Metering Code of Practice Consolidation Review
What is the Metering Code of Practice Consolidation Review?
On the 1st April 2023, we are consolidating all metering codes of practice into a single set of arrangements under the Retail Energy Code. Combining the:
- Gas Metering Code of Practice (MCoP),
- Meter Operation Code of Practice (MOCoP),
- Automated Meter Reader Service Provider Code of Practice (ASPCoP) and
- Smart Meter Installation Code of Practice (SMICoP).
Please visit the REC Portal for the approved new arrangements.
In parallel to creating a single set of arrangements, we have procured a single Metering Auditor, Wilcock Consultants. They have started engaging with affected REC parties to advise them of the change and what this means. If you have any questions, please contact: firstname.lastname@example.org.
On 1st March 2023, we held a stakeholder session to outline the changes, what this means for code parties, and to introduce the new Metering auditor Wilcock Consultants. If you would like to find out more, you can watch the recording here.
On 29th March 2023, the Code Manager published a podcast where Wilcock Consultants discussed the Metering Audit Scheme and the impacts on Metering Parties. Listen here.
Objective and Scope of Review
The review guiding principles were to:
- Remove duplication
- Simplify the code
- Drive efficiency, both in the audit scheme and adherence to the CoP(s)
- Assess for validity and relevance to the current environment regarding potential impacts upon competition and innovation
- Facilitate accreditations being awarded a single audit
- Remove barriers to entry
- Ensure code protects the needs of the energy consumers
Who is affected by the CoP Consolidation Review
The Parties who are required to understand and meet the arrangements are Meter Equipment Managers (MEMs), Meter Installers (MIs), Suppliers, Distributors, Gas Transporters and current scheme auditors.
The regulatory workstream reviewed and combined the current metering codes of practice and audit processes, developing a single set of streamlined arrangements, to provide a better experience for market participants.
Post consultation and approval of the new arrangements, engagement has continued through RECCo newsletter updates, weekly Code Manager bulletins, engagement via committees (including the Metering Expert Panel), and direct communications between the new auditor and affected parties.
On 1st March 2023, we hosted a session to provide details of the scheme and introduce parties to Wilcock Consultants. If you missed it, you can access the recording here.
Further details of the release plan can be found on the REC Portal Release Page under the April 2023 release section.
Find out more
We will provide monthly updates via the RECCo newsletter and the Metering Expert Panel area of the Portal.
Any additional feedback or questions can be emailed to the Project Lead, Aiyesha Andrade.
Market Stabilisation Charge (MSC)
What is the Market Stabilisation Charge?
From 15 December 2021 to 17 January 2022, Ofgem consulted on a range of potential temporary measures to enable domestic suppliers to better manage risks created by current wholesale market volatility, which could lead to higher costs for consumers in the event of further significant supplier exits from the market.
On 16th February 2022, Ofgem published a decision document to introduce two measures which they believe are in consumers’ interests. This includes a requirement for suppliers to pay a Market Stabilisation Charge (MSC) when acquiring new customers.
The MSC is a charge which is to be levied on suppliers who gain customers through switching. The MSC is a £ per kWh charge which Ofgem will determine on a weekly basis. When a customer switches to a new supplier, the MSC in effect at the time of the switch is multiplied by the customer’s annual consumption and the gaining supplier pays that amount into the scheme. The collected payments will be distributed amongst suppliers who lose customers and is intended to compensate a proportion of the economic loss and insulate the market from the destabilising effects of a significant change in the price of wholesale energy.
These documents contain tables showing the invoice and payment scheduling for each 4-Week MSC Cycle, detailing payment deadlines for Suppliers and RECCo.
MSC Payment Details
The document below details the total value of invoices sent to Suppliers and the proportion of that amount collected from Suppliers. For Suppliers due to receive payment from the scheme, it includes the proportion of their calculated credit that RECCo has paid out for the current & previous invoice periods.