We welcome the opportunity to respond to the initial consultation on Implementing the Competition and markets authority’s recommendations. We have responded to a number of your specific questions.
In our previous responses (e.g. to the CMA), we explained there are a number of important considerations to take into account as we move forward with respect to the proposed remedies, noting in particular the ‘Recommendations’ which propose an Ofgem Strategic Direction, Consultative Board, and in particular the Recommendation that seeks to licence code administration and delivery services.
Gemserv is responding from the perspective of a UK based independent specialist utilities consultancy firm, heavily involved in the UK energy market and environment sector. Gemserv has been at the heart of the UK energy market since 2002, and in particular, manages central market industry codes, agreements and systems such as the Smart Energy Code Administrator and Secretariat (SECAS), the assurance provider for the Retail Market Design Service (RMDS) in Ireland, and as the administrator for the Microgeneration Certification Scheme (MCS).
Gemserv is responding from the perspective of a UK based, specialist utilities consultancy firm. Although we conduct information security work internationally, we are also heavily involved in the UK energy market.
Gemserv has been at the heart of the UK energy market since 2002, and in particular, managing central market industry codes and agreements and systems. Industry codes play a fundamental role with respect to interoperability across the Great British energy market. Legislative and policy changes can have a significant impact on these codes, and therefore on how market participants interact with each other.
The consideration of the costs and benefits of the introduction of retail competition to residential customers is an important component in the Government’s broader vision for opening up markets to new markets, promoting more competition, driving efficiency and innovation.
Gemserv recognises the challenges posed to Ofwat in undertaking its analysis given the wide range of uncertainties and the consequent need to undertake scenario analysis against different sets of assumptions and welcomes the opportunity to respond to this consultation on the costs and benefits of residential market competition.
Gemserv’s experience and understanding of the regulation and governance of energy markets is extensive. Many of our people come from the industry it serves, people that have a deep and comprehensive understanding of the regulated energy sector and practical experience of the regulated businesses that operate within that market. We therefore trust that our response will provide Ofgem with useful insight and an objective perspective as it moves forward to remove unnecessarily prescriptive regulation, i.e. to deliver licences that are shorter, more accessible and clearer.
We welcome the opportunity to respond to the consultation on the Code Governance Review (Phase 3) – Initial Proposals (CGR3).
We understand that Ofgem’s CGR3 work is focused on incremental change and we have responded accordingly. Nonetheless, our stakeholders are struggling with a very complex change landscape with competing priorities, not least being those related to Nexus, settlement, Theft Risk Assessment Services (TRAS), Faster Switching and now centralised registration. All against a backdrop of smart metering roll out and environmental policy change.
Energy markets by their nature are complex and this complexity is reflected in the nature of the supporting multiparty codes and agreements (“codes”). Without this approach, it is our experience that effective market interoperability and fair market practices would be at risk. We believe that codes have performed remarkably well, contending with significant volumes of change and market reform initiatives. Market changes are necessary to ensure energy market participants are able to continue to work effectively together whilst, at the same time, enabling those important Government driven, consumer focused, transformational initiatives to be implemented.
Gemserv is a specialist energy, environment, water, and information security consultancy – we have over 15 years’ experience across the utility sector, placing us at the forefront of major policy developments and industry initiatives. We have also been instrumental in supporting the implementation of the UK Government energy efficiency programmes and we play a fundamental… Read more »
Gemserv agrees with the CMA findings that simply consolidating industry codes would not lead to a positive impact in support of competition. In our initial response, we explained how the sheer weight of market reform is overwhelming many supplier organisations, especially smaller organisations, and there was more that could be done to improve the code… Read more »
The energy market is undergoing unprecedented levels of reform, and it is the degree of transformation that is causing the greatest difficulty for organisations. This is evident, for example, by the submissions made to the Competition and Market Authority (CMA) Energy Markets Investigation and from feedback at the independent suppliers’ day held by Gemserv in… Read more »