To meet European legislation, the UK must shift its 24-hour trading period for gas – the “gas day” – to start an hour earlier, at 5am GMT.
The UK has until November 2015 to comply with the legislation, which is intended to create an efficient energy market across European borders.
However, industry figures complain that government did not consider the cost before committing to the change. It will involve overhauling IT systems and renegotiating thousands of contracts all the way from offshore fields to the customer meter, they say. Some shippers are predicting costs of £5 million apiece, with the cost to the whole industry estimated at £100 million.
David Cox, managing director of the Gas Forum, told Utility Week: “We are very concerned that this regulation is being brought in and the industry is evaluating the cost, and at the moment is struggling to find any benefits.”
Any extra costs are likely to either eat into the tax take from gas production or be passed through into customer bills.
“We are told that the benefit would be to boost the competitiveness of the energy markets across Europe,” said one industry source who did not wish to be named. “But we have already got the most competitive market in Europe. It seems as though we are paying for benefits to consumers in other places – it is certainly not for the good of UK consumers.”
Market consultant Patrick Heather questioned the cost claims. He said: “The industry is making this huge fuss… I don’t see what the difference is between a clock change twice a year and this one-off change.
“Ultimately, it will be simpler. We are the odd man out in Europe. If you want to do business, it is a lot easier to have standardisation.”
Ofgem is considering licence changes and updates to regulation, while National Grid is proposing to modify the Uniform Network Code. An Ofgem spokeswoman said implementation of the change “is in the early stages”.
A spokesperson for the Department of Energy and Climate Change said: These changes are coming into effect through the EU to harmonise gas network codes across Europe to facilitate ease of gas trading between countries.
“Details of how these codes are implemented is a matter for the regulator working with the gas industry.”