Smart Meter Communication Licence Code Changes
Summary
Ofgem has awarded the Smart Meter Communications Licence 2 (SMCL2) to DCC2 Limited, a subsidiary of Smart Energy Code Company Limited (SECCo). To enable a smooth transition and ensure continuity of service, changes to both the Smart Energy Code (SEC) and the Retail Energy Code (REC) will be required.
Latest update and next planned activity
Date of latest update
Latest Update
28/08/2026 - The consultation has closed - The Code Manager now present this Change Proposal for a final vote at the REC Change Panel on 15 September 2026.
Impacts Overview
Impacted REC Parties and Market Participants
DCC
Impacted REC Documents
REC Main Body
Schedule 1 - Interpretations and Definitions
Schedule 6 - Performance Assurance
Other Industry Codes impacted
Smart Energy Code (SEC)
Priority and rationale
High
Priority last updated on 17 Sep 2026
Solution development
No documents available.
There is currently no Change Plan.
Original submission
Change details
- - -
12 Jun 2026
Change details
Smart Meter Communication Licence Code Changes
Ofgem has awarded the Smart Meter Communications Licence 2 (SMCL2) to DCC2 Limited, a subsidiary of Smart Energy Code Company Limited (SECCo). In line with this award and Condition 43 of the current DCC licence (SMCL1), Business Handover from the DCC (DCC1) to DCC2 is expected to take place on 2 November 2026.
To enable a smooth transition and ensure continuity of service, changes to both the Smart Energy Code (SEC) and the Retail Energy Code (REC) will be required. These changes are necessary to support transitional arrangements ahead of Business Handover, as well as to provide legal and operational certainty at the point the Authorised Business is transferred. Without timely and coordinated code change, there is a risk to industry confidence, service continuity, and delivery of enduring SMCL2 arrangements.
Ofgem has asked the relevant code administrators to lead on implementing the required code changes. This expectation is reinforced in the draft second Strategic which sets out Ofgem’s clear expectation that industry should pursue “act now category” code changes to support the transition to DCC2 and reduce delivery risk ahead of Business Handover.
To enable a smooth transition and ensure continuity of service, changes to both the Smart Energy Code (SEC) and the Retail Energy Code (REC) will be required. These changes are necessary to support transitional arrangements ahead of Business Handover, as well as to provide legal and operational certainty at the point the Authorised Business is transferred. Without timely and coordinated code change, there is a risk to industry confidence, service continuity, and delivery of enduring SMCL2 arrangements.
Ofgem has asked the relevant code administrators to lead on implementing the required code changes. This expectation is reinforced in the draft second Strategic which sets out Ofgem’s clear expectation that industry should pursue “act now category” code changes to support the transition to DCC2 and reduce delivery risk ahead of Business Handover.
Since the award of the SMCL2 to DCC2, there is now a period which both SMCL1 and SMCL2 are active concurrently. During this period:
DCC1 will continue to operate under SMCL1, subject to any further licence changes and/or progressive disapplication of obligations as directed by Ofgem; and
DCC2 will hold SMCL2, although not all licence obligations are to be “switched on” immediately.
Given the dual licence situation, it is essential that the SEC and REC can operate effectively during a period in which more than one smart metering communication licensee exists, while also accommodating the transfer of the Authorised Business on the Transfer Date.
DCC1 will continue to operate under SMCL1, subject to any further licence changes and/or progressive disapplication of obligations as directed by Ofgem; and
DCC2 will hold SMCL2, although not all licence obligations are to be “switched on” immediately.
Given the dual licence situation, it is essential that the SEC and REC can operate effectively during a period in which more than one smart metering communication licensee exists, while also accommodating the transfer of the Authorised Business on the Transfer Date.
Schedule 1 includes the following definitions:
• The “Data Communications Company” is defined “the person holding the DCC Licence.”.
• “DCC Licence” is defined “means the licences granted under section 6(1A) of the Electricity Act and section 7AB (2) of the Gas Act.”.
At the point the new SMCL2 is awarded but before the point of Business Handover, both DCC1 and the incoming DCC2 can be said to hold a licence “granted under section 6(1A) and section 7AB(2)”.
This will create interpretive ambiguity in the REC as the definitions do not specify which licence (SMCL1 or SMCL2) and it does not explicitly allow dual licence periods and therefore the transition.
The Main Body of the REC refers to the DCC Licence and Condition 15 in two areas:
• Category of Parties: paragraph 2.2 refers to “Condition 15 (Incorporation, delivery and provision of the Centralised Registration Service) of the DCC Licence”
• CRS Services IPR: paragraph 13.5 refers to “Condition 15.4(d) and Condition 15.5AA(c) of the DCC Licence.”.
Schedule 6 refers to the DCC Licence in relation to the CRS Provider’s revenue at risk which is set out in the DCC Licence. This will need to be reviewed as part of the new incentive regime and guidance.
“The CRS Provider's maximum revenue at risk in respect of Performance Charges is determined under the DCC Licence pursuant to the Switching Incentive Regime Guidance (as defined in the DCC Licence), which sets out the percentage of the Centralised Registration Service Margin (as defined in the DCC Licence) which is at risk in respect of the Performance Levels under this Code”
And changes (provided) to clause 5 CRS Provider Performance Levels.
• The “Data Communications Company” is defined “the person holding the DCC Licence.”.
• “DCC Licence” is defined “means the licences granted under section 6(1A) of the Electricity Act and section 7AB (2) of the Gas Act.”.
At the point the new SMCL2 is awarded but before the point of Business Handover, both DCC1 and the incoming DCC2 can be said to hold a licence “granted under section 6(1A) and section 7AB(2)”.
This will create interpretive ambiguity in the REC as the definitions do not specify which licence (SMCL1 or SMCL2) and it does not explicitly allow dual licence periods and therefore the transition.
The Main Body of the REC refers to the DCC Licence and Condition 15 in two areas:
• Category of Parties: paragraph 2.2 refers to “Condition 15 (Incorporation, delivery and provision of the Centralised Registration Service) of the DCC Licence”
• CRS Services IPR: paragraph 13.5 refers to “Condition 15.4(d) and Condition 15.5AA(c) of the DCC Licence.”.
Schedule 6 refers to the DCC Licence in relation to the CRS Provider’s revenue at risk which is set out in the DCC Licence. This will need to be reviewed as part of the new incentive regime and guidance.
“The CRS Provider's maximum revenue at risk in respect of Performance Charges is determined under the DCC Licence pursuant to the Switching Incentive Regime Guidance (as defined in the DCC Licence), which sets out the percentage of the Centralised Registration Service Margin (as defined in the DCC Licence) which is at risk in respect of the Performance Levels under this Code”
And changes (provided) to clause 5 CRS Provider Performance Levels.
-
Impacts
No details provided
Other (please provide details in Additional information box below)
There is no direct consumer impact.
REC Main Body, Schedule 1 - Interpretations and Definitions, Schedule 6 - Performance Assurance
-
No details provided
-
No details provided
-
No details provided
-
No details provided
-
No details provided
-
DCC
-
Smart Energy Code (SEC)
-
-
No details provided
Priority & timing
No
No, however due to implementation timescales, should be considered urgent when determining the change proposal plan.
-
-
No details provided
Other (please provide details in the Additional information box below)