The Smart Export Guarantee (SEG) requires certain licensed electricity suppliers to offer a tariff and make payment to small-scale low-carbon generators for electricity exported to the National Grid, providing certain criteria are met.
These suppliers have specific obligations under Conditions 57 and 58 of the Standard Conditions of the Electricity Supply Licences ("the SLCs").
All licensed electricity suppliers are required to participate in declaring their SEG status on an annual basis.
Becoming an SEG Licensee
Licensed electricity suppliers are only obligated to provide SEG payments to generators if they are confirmed to be an SEG licensee.
By 14 February of each SEG year all licensed electricity suppliers must notify Ofgem whether in the next SEG Year they will be a:
- Mandatory SEG licensee, if they have at least 150,000 domestic electricity customers as at 31 December of the immediately preceding year. These licensees are obligated to offer payment to certain eligible generators.
- Voluntary FIT licensee, if they have fewer than 150,000 domestic electricity customers and elect to participate in the SEG arrangements.
- Non-SEG licensee, if neither of the above apply. Non-SEG licensees can still make export payments to generators, but will not be bound by the SEG arrangements.
The status will then apply for the duration of the relevant year (1 April - 31 March) in which they enter.
Note that for the first SEG Year running for the period 1 January - 31 March 2020, Ofgem will set up a process for licensees to advise Ofgem of their status under the SEG during that year.
We will provide guidance on the role of licensed electricity suppliers in Autumn 2019.