Ofgem under fire for central switching service procurement

The blockchain energy systems developer Electron has criticised Ofgem’s approach to procuring a new central switching service (CSS) for being “limited in scope”.

The London-based firm’s chief executive, Paul Ellis, has written an open letter to his opposite number at the regulator, Dermot Nolan, claiming Ofgem is “is in danger of missing an important opportunity” which could result in the UK “being locked into an outdated, inflexible system for the next 20 years”.

The letter adds the CSS is an opportunity to create a decentralised data service with “implications that go far beyond faster switching”.

“For example, the development of local energy and flexibility markets requires visibility of current and future local assets, their exact location and the balance responsible party.

“Ofgem’s current approach is limited in scope, mandating a small part of the switching infrastructure that replicates the current technical requirements,” the letter states.

“This will perpetuate issues with data quality and favours large incumbent service providers,” it adds. “We believe that this approach, if pursued will be a major missed opportunity.

“It would also be irrational, as the CSS procurement in its current configuration, is contrary to the objectives of the call for evidence.”

Electron is also hosting a “hackathon” in February to allow specialists to interact with its decentralised registration platform.

“The suppliers with whom we have discussed and scoped this platform are more concerned with accurate switching on the basis of better quality data than switching faster,” said Ellis.

“They are keen to automate registration processes in their own systems and are exploring new services that can be integrated with an accurate representation of customers’ assets.

“A hackathon is our way of working with them to demonstrate how a decentralised platform can unlock the capabilities that enable them to do so.”

In response to the letter, an Ofgem spokesperson said: “Ofgem is committed to driving innovation in the energy industry, with the faster and more reliable switching programme a major enabler of innovation itself. We’ve embedded this commitment into the design of the programme, with a specific principle to ensure we don’t create barriers to innovation, and that we engage and consult widely with stakeholders to achieve this.”