Details of the requirements for suppliers, as well as the information generators will be required to provide to receive Smart Export Guarantee (SEG) payments, have been revealed in draft guidance published by Ofgem.
The regulator is consulting on its guidance, outlining the requirements for suppliers who are mandated to offer an export tariff and those voluntarily offering one to be compliant with the licensing conditions.
Suppliers must take "all reasonable steps" to ensure information given to generators - that is, those with a solar, wind or hydro asset under 5MW - is accurate, capable of being easily understood, is not misleading and is fair, transparent, appropriate and delivered in "a professional manner".
Written confirmation must also be provided to generators with details of the export tariff, as soon as reasonably practicable.
Suppliers must communicate the risks to a generator of failing to adhere to any terms of its contract, for example failing to provide the required data in a timely fashion, and as regards suspension or recoupment of SEG payments.
Suppliers must also outline the generator’s obligations for providing information, declarations and evidence to the supplier and authority as well as any consents required and a term requiring the generator to inform the supplier as soon as reasonable possible if there is a change of ownership or any extensions to an installation.
Other information that must be provided to generators includes:
- A description of the complaints procedure, which the supplier will be responsible for;
- A description of the switching process, and;
- Termination rights.
Suppliers must then provide data to Ofgem on an annual basis, which will be published in an annual report beginning in 2021.
Data provided must include the export tariffs offered, the number of eligible installations receiving payments, how much export has received payments, the total amount of payments, a breakdown of payments into a 0-50kW category and >50kW-1MW category and the energy source generating.
Storage in the SEG
The Department for Business, Energy and Industrial Strategy (BEIS) confirmed that storage would be eligible for SEG payments provided it was co-located with a renewable asset that was also eligble. However, this relies on metering that can determine whether the energy is from said renewable source or if it is, in fact, a brown export.
A supplier can choose to make payments if a meter is unable to determine, meaning non-renewable generation can receive SEG payments, but is not obligated to. In addition, it can require a generator to install metering able to calculate the percentage of brown vs green export, or pro-rate output or use estimates.
Metering is an integral element of the SEG, which requires a meter capable of measuring export at half-hourly intervals, most likely through a smart meter. Suppliers won’t be required to make payment until they are provided with meter readings, which can either be automatic or as manual readings.
The meter must have an associated export MPAN and be registered under the Balancing and Settlement Code.
In receipt of other payment
Generators are able to receive SEG payments alongside other government support arrangements, including grants, although generators receiving feed-in tariff (FiT) payments are not eligible.
To verify this, Ofgem is suggesting suppliers use the Central FiT Register and search using the SEG function, showing whether an installation associated with a specific MPAN is recorded as receiving FiT export payments.
However, suppliers are also recommended to seek other forms of assurance, such as declaration, as some MPANs may be entered incorrectly.
The use of the central register came under discussion at last months’ Solar and Storage Live, where Gemma Stanley, Policy Analyst at the Solar Trade Association, said it felt like a “large operational blocker”.
Octopus Energy – the only supplier offering an export tariff to all its customers – also corroborated that the process is laborious due to having to manually check for each and every customer signing up.
Phil Steele, future technology evangelist at Octopus, said at the event: “It takes quite a lot of time and effort and it can be quite a difficult process.”
Who's who in enforcement
Last month, William Marks, policy lead for the SEG at BEIS, said he was “sure” BEIS would intervene and “alter the legislation to do something differently” if suppliers failed to come out with export tariffs on 1 January 2020, the date the SEG comes into full effect.
In Ofgem's proposed guidance, if a supplier is in breach of a requirement under the Electricity Supply Licence Conditions, Ofgem “may use its enforcement powers”. It will have regard to the Enforcement Guidelines when deciding if and how to investigate a potential breach.
However, in a case of insolvency, Ofgem will not have the power to order a new supplier to make payments for exports. Generators will have to seek payment from other generators themselves, it said.
The consultation on Ofgem's guidelines closes on 6 November 2019.