Policy & regulation, News

Differences between current regimes could be a barrier to new entrants, says Electralink

Data transfer company Electralink has called for the set up of a common governance regime for the codes which administer the use of the UK’s energy system.

Differences between the regimes which are currently in place could be preventing the rise of newer, smaller companies, according to the firm’s acting head of governance services, Stefan Leedham.

“What you see is, as the codes have developed over the years and you’ve had new codes come along, everybody is taking new approaches to code governance,” Leedham told Utility Week.

“It’s not to say any particular code is right and therefore all the others are wrong, but I really think there’s a good opportunity now for a review of the different codes and the processes and governance across the industry.”

Leedham said the variation between regimes, which all have individual nuances, could be a barrier to the growth of newer, smaller companies that often lack the resources to represent their interests and engage with code governance processes.  

Putting in place a common regime with “one route to change across the industry” would make code governance “more efficient and more representative”. He said even larger companies are concerned that “resourcing the level of change in the industry is becoming harder and harder to do.”

Leedham called for a review into code governance after several parties raised concerns that the Connection and Use of System Code (CUSC) panel, which reviews changes to the code governing the use of the transmission network, is dominated by the employees of incumbents

Mathew Lockwood, a senior research fellow at the University of Exeter’s Energy Policy Group, told Utility Week this a problem for a number of similar panels and said a public body should take over the responsibility for code governance.

Responding to Lockwood’s comments, Leedham said he is “torn” on the issue of how the panels should operate, as there is a trade-off between independence and expertise.

Whilst it is important to have panels which can offer a “truly independent view”, he said it is also “absolutely vital” to be able to tap into the “huge amount of knowledge and information” which the employees of some companies have built up over long careers in the energy industry. “I think it’s about getting the right balance”, he added.   

Leadham also said it is partly down to Ofgem to ensure the independent of code governance. “All significant changes that impact on customers should be going to them as the ultimate arbiter of change”.

Asked whether more independent members should be appointed to the panels by Ofgem, he said it was an option “worth exploring”. “I think we have to look at the costs, as obviously if you’re independent you need to be remunerated for your time.”

As well as operating the Data Transfer Network, Electralink also administers the Distribution Connection and Use of System Agreement and the Supply Point Administration Agreement. 

Last week Ofgem revealed plans to drastically cut the value of the triad avoidance payments available to distributed generation following a review of embedded benefits by the CUSC panel. 

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