GovWire

Consultation outcome: Future ownership of Elexon: licence and code changes

Ofgem

August 21
11:00 2024

The implementation of Elexons new ownership structure will involve modifying electricity supply and generation licences to enable the Secretary of State and the Gas and Electricity Markets Authority to direct parties to hold a share in Elexon. The Balancing and Settlement Code (BSC) will be modified, as needed, to support implementation of the new ownership arrangements. These modifications will be made using powers in the Energy Act 2023, sections 169 and 170, subject to the Secretary of State deciding to proceed with the establishment of the National Energy System Operator (NESO).

This joint Department and Ofgem response sets out our conclusions about the modifications to be made to implement the Elexon ownership change, outlining additional detail and clarifications that have been added to the Elexon ownership statement of policy, licence conditions, and code text, based on the responses to the consultation.

We will publish a separate decision notice about the licence and code changes related to the future ownership of Elexon, once the Secretary of State has reached a decision.

Detail of feedback received

We received 11 responses from a mix of generators and suppliers (including companies which have both electricity supply and generation licences) and other industry parties.

The responses were generally supportive of the proposed changes to the licence and code needed to implement the ownership change. Some respondents requested clarity on aspects of the policy, for example on how the shareholder cohort will be topped up in the future.


Original consultation

Summary

We're seeking views on proposals for new licence conditions and code changes to implement the new ownership arrangements for Elexon.

This consultation ran from
to

Consultation description

This consultation seeks views on our proposals for the new supply and generation licence conditions and changes to the Balancing and Settlement Code (BSC) required to implement the new ownership arrangements for Elexon.

It also sets out wider policy decisions relating to the ownership of shares in Elexon, to provide supporting guidance and context for the proposed modifications.

The March 2023 government and Ofgem response set out our decision that Elexon will remain an industry body with its shares held by a subset of the industry parties that fund it.

The creation of the Future System Operator (FSO) as a public corporation and the associated purchase of National Grid Electricity System Operator (NGESO) necessitate a change in ownership for Elexon, because Elexon is currently wholly owned by NGESO.

We will make the changes to the ownership structure, licence conditions and code using powers in the Energy Act 2023. The changes involve:

  • reflecting the change of ownership in the BSC, which sets out rights and responsibilities of the shareholders, management of the allocation and transfer of shares, and treatment of liabilities
  • creating new licence conditions to enable the Secretary of State and the Gas and Electricity Markets Authority to direct relevant parties to hold a share in Elexon

Read our consultation privacy notice.

Responding by email

This consultation is held jointly with Ofgem. Please copy your responses to both addresses:

futuresystemoperator@energysecurity.gov.uk

and

FSO@ofgem.gov.uk

Documents

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