How regulation is putting the energy customer in the driver’s seat
The responsibility of complying with regulation concerning the coming Sector Release 2017 falls mainly upon energy suppliers while at the same time it puts the customer in the driver’s seat. To be compliant, market parties have to review and re-design business processes. And while regulation brings operational challenges and pain, it also creates opportunity. Sia is on top of market changes and takes customers by the hand. In our customer journey for compliancy, we use a three step approach.
Market changes are implemented through the Sector Release
Energy market changes in the Netherlands are introduced through the Sector Release. These changes can be the result of new regulation or arise from a need for new or improved functionality by market parties. The Dutch Sector Release 2017 comes into effect on 24th March 2018 and contains two pillars. 1) New data protection regulation for energy customers is enforced and 2) customers acquire extended freedom of supplier choice by the possibility to contract multiple suppliers on one electricity connection. The main affected market role is the Supplier. They are preparing for organisational and operational changes that the Sector Release entail. To a lesser extent, at the back-end, also the Balance Responsible Party is affected (only by the latter pillar).
Customer data protection in the energy sector
The EU General Data Protection Regulation (GDPR) comes into effect in May 2018 and will supersede all EU member states’ current national data protection laws. This brings a universal framework to data protection throughout the EU. One of the main changes under the GDPR is that all organisations must report a personal data breach to their supervisory authority .
The Netherlands have already for years fairly strict privacy laws. Since January 2016, companies in the country are compelled to report data breaches to the privacy watchdog .
In the summer of 2016 an energy supplier came under fire after a massive data breach was discovered . The Dutch Authority for Consumers and Markets (ACM) and the Dutch privacy Data Protection Authority (DPA) since then demanded stricter policy of data protection of customer data in the energy sector.
To take the protection of customer data in the energy sector to a higher level, the Data Security Action Plan is put forward by all relevant market parties. The implementation of this Plan is part of the Sector Release of 2017 which comes into force on the go-live date of 24st March 2018.
Currently it is possible for an energy supplier to request complete datasets from the central market systems for their own customers, but also for potential customers who have not yet signed a contract. For data requests no explicit permission is required from the potential customer.
To prevent unauthorized data requests from energy suppliers of small-scale users, a couple of measures are introduced which come into effect on the go-live date of the Sector Release 2017. Data requests by suppliers are divided into four Phases (see figure below) in which a minimized set of information per phase is returned. Requests for datasets of large-scale users remain unchanged.
In Phase I where the connection is identified by the energy supplier, no permission is required from the customer. The supplier receives only basic data of the connection.
Phase II: To provide a potential customer a custom-made offer based on connection data, the potential customer gives explicit permission to the energy supplier through a Customer Key. Then, the supplier generates a Permission Key and stores for audit purposes.
N.B. It is not mandatory for a supplier to work with the Customer and Permission Key. However, the supplier will not receive additional data of the connection. The supplier only have basic data (previous phase) to make a custom-made offer.
Phase III: The supplier and the customer have a signed supply contract. The supplier pre-registers the contract in the central market system to receive a standard dataset to prepare the switch/move-in.
Phase IV: At the start date of delivery the supplier receives the full data set of the connection.
To be compliant with data protection regulation, suppliers have to review and re-design business processes but also in such a way that marketing and sales activities are managed.
Extended freedom of supplier choice: multiple suppliers on one electricity connection
The Sector Release 2017 also includes another important change. It will be possible for customers and companies to have more than one separate and active supply contract on one physical electricity connection. The aim is to facilitate the energy transition in the long-term. For instance, the customer can choose a different supplier for power supply than for self-generated power to the grid (see figure below). This cuts down costs as customers do not need to request an additional connection. But it also promotes competition as the customer can select the supplier with the best possible deal.
How does this work in practice? The customer requests one or more allocation points to his existing electricity connection. An allocation point is a virtual point at the connection transfer point. The connection transfer point is the physical point where the energy exchange occurs between the connected party and the Distribution System Operator of the grid. Therefore, the allocation point takes part in market processes as if it is an independent connection.
Not only energy suppliers are affected but Balance Responsible Parties have to adapt their processes as well. Similarly, Distribution System Operators and Metering Point Operators have to facilitate this change.
In the gas sector, it is already possible to contract several suppliers on one connection for the high pressure transmission network. Large-scale users had this option on the distribution networks until August 2013, but this possibility has never been used in practice, after which the functionality has expired .
It remains to be seen if customers will indeed contract multiple suppliers on their electricity connection. And if suppliers will develop all kinds of propositions to seduce customers: for example the car/leasing company would not only provide an electric vehicle, but also the charging station plus a supply contract with guaranteed electricity from a renewable source.
 Energeia, 13-09-2016, Energiedata twee miljoen huishoudens gestolen
 Energeia, 27-02-2017, Meerdere leveranciers op één aansluiting volgend jaar mogelijk https://energeia.nl/nieuws/40022972/meerdere-leveranciers-op-een-aansluiting-volgend-jaar-mogelijk
About the Authors
Erwin Loonen – Supervising Consultant
Erwin has been involved in many large scale IT and data management projects as a project manager, business analyst or data analyst. He has thorough knowledge of all energy data management processes for a wide range of market parties, such as suppliers, traders and grid operators.
Sofia Cherif – Consultant Energy & Utilities
Sofia works with suppliers in the Energy & Utilities industry to ensure regulatory compliance. She has gained extensive industry knowledge of the energy sector through various projects across the value chain.