A message from the Chairman
Dr Chris Anastasi RECCo Chairman
I am delighted to be writing to you at the start of what may be a pivotal year for retail energy governance and potentially for the wider industry. Whilst 2020 will be remembered for the economic and societal impacts of the Coronavirus, in many ways our collective response to the virus also brought into sharp focus some of the challenges that the energy industry has been facing for years and hastened our need to be adaptive and flexible in meeting those challenges. Working patterns and other aspects of our daily lives have undergone a fundamental change in a matter of months, boosting new economy companies but imposing challenging economic conditions on others, including consumers. Whilst it remains to be seen how much of this ‘new normal’ will endure once the worst of the pandemic is behind us, there will be many lessons that we can take forward. The impact of Covid-19 upon normal human activities and in turn our energy use and carbon emissions are providing some valuable insights into the extent of change that may be required for the UK to meet its target of net-zero greenhouse gas emissions by 2050. It is against this backdrop that the Government recently published its energy white paper: Powering our Net-Zero Future, and the summary of responses to its earlier consultation on reforming the energy industry codes. In delivering the Retail Energy Code (REC) and the future industry changes that it will facilitate, RECCo hopes to play its own small part in meeting these challenges.
We welcome the recent publication of Ofgem’s Forward Work Programme and will look to identify opportunities for collaborative work with Ofgem to identify areas where the ongoing development of the REC will facilitate that programme.
The RECCo Board is committed to the efficient and effective running of the retail energy market, including its systems and processes.
It took an innovative approach to the procurement of the Code Manager services, determining that it would be able to secure both market-leading competencies and value for money by disaggregating the core functions and procuring them as separate lots, with certain strategic and corporate services being retained in-house. Following a highly competitive process, we are now delighted to be working with three established and experienced service providers that are aligned with our vision and will strive to promote innovation, competition and positive customer outcomes.
Has been appointed to the role of REC Professional Services provider (RPS). Gemserv will be responsible for delivering the REC Portal, which parties and stakeholders will use to communicate with all Code Manager services irrespective of provider. In addition, they will offer support to parties through Operational Account Managers, manage the change process, provide the front-line service desk and the REC knowledge repository.
Will undertake the role of REC Technical Service provider (RTS). CapGemini will be responsible for delivering and implementing the REC Digitalisation Strategy, development, and maintenance of the Energy Market Architecture Repository (EMAR) and undertaking the role of Technical Design Authority. The EMAR will contain the digital twin of the code and will include all industry code data items, messages, processes, services and business rules.
Has been appointed as REC Performance Assurance provider (RPA). In this role, Deloitte will monitor market participant and service provider performance, using dynamic risk assessments, digital technologies, and analytics to help drive market and code improvements. Deloitte will be responsible for administering the REC Party entry and exit process on behalf of the Performance Assurance Board (PAB) and will develop and implement the REC Performance Assurance Framework (PAF) to identify, assess and mitigate retail market risks, working collaboratively with the other code manager functions and other REC service providers.
The three Code Manager service providers will collaborate to deliver a seamless ‘one Code Manager’ function for the industry. Whilst their, and our, initial focus will be on mobilising the code management function and other services in readiness for the substantive implementation of the REC on 1 September 2021, we very much hope that this collaborative approach will extend beyond the boundaries of the REC. Our aim is to provide customer journeys that are, as far as practicable, joined up across codes on relevant processes such as market entry, change management and performance assurance.
We have been encouraged by, and grateful for, the early support we have received from the other code bodies and their service providers and look forward to making further progress in the coming months. The ongoing mobilisation and enduring full operational readiness of these Code Management services together with the effective transition of existing services, that will in future provided through and/or governed by the REC, will be our main priority for the first half of 2021-2022. The activities associated with mobilisation and transition make up much of our forward work programme for the coming year. This paper highlights some of those activities. We will issue further communications shortly, including details of how and when stakeholders can get involved.
Whilst the mobilisation of Code Management is our priority, we are also cognisant of external developments and that expectation that REC will have a role in, if not shape them. From its establishment in February 2019, RECCo has provided support to the Switching Programme and to Retail Code Consolidation, both of which are being progressed through Ofgem-led Significant Code Reviews. This support has been in the form of direct provision of Subject Matter Expertise, and more indirectly through the provision of funding for the Switching Programme Coordinator, and Licensed Party Assurance, both of which procured and continue to be contract managed by Ofgem. These programme funding requirements will continue to make up a significant proportion of the RECCo budget until the Switching Programme is complete, at which point RECCo is likely to take on operation responsibility for the funding and oversight of the Central Switching Service, as governed through the REC. RECCo and the REC Code Manager will therefore play an increasingly active role in the Switching Programme, and other aspects of Ofgem’s Forward Work Programme, which have an impact upon retail arrangements.
To support this evolving role, we look forward to strengthening the RECCo team and Board.
We will shortly appoint Non-Executive Directors with backgrounds in digital transformation and consumer affairs, adding important elements of independence and external perspective to a Board that has a deep collective knowledge of and expertise in the energy industry. We also look forward to appointing a CEO to lead the RECCo team as we gear up towards the implementation of REC v2.0, giving effect to the Retail Code Consolidation, and beyond. We believe that this strategy and work programme will both ensure the successful delivery of the REC and facilitate improvements and efficiencies to the services provided in support of the REC arrangements. However, that is ultimately for you as REC Parties and/or stakeholders to judge. We invite and look forward to receiving your comments on this paper, which will help inform the Board’s decisions on both its strategy and associated budget.