GovWire

Open consultation: National Energy System Operator (NESO) licences and other impacted licences: statutory consultation

Ofgem

March 28
09:59 2024

Ofgem and the Department for Energy Security and Net Zero are jointly consulting on 2 Ofgem regulated licences for the National Energy System Operator (NESO) which cover its obligations regarding electricity and gas functions.

The consultation document also acts as a response to previous consultations and includes connected announcements.

Government and Ofgem previously set out a commitment to create a publicly owned body, theFuture System Operator (now called NESO), as an impartial expert, with responsibilities across both the electricity and gas systems.

The 2 licences will be regulated by Ofgem:

  • an Electricity System Operator (ESO) licence covering its obligations regarding its electricity functions
  • a Gas System Planner (GSP) licence covering its obligations regarding its gas functions

The licences will include conditions for:

  • the business conduct and independence of NESO
  • its strategic and operational functions
  • its roles including the provision of advice and information to government
  • its obligations concerning energy industry codes and charging

We are now consulting on:

  • a proposal to grant (or treat as granted) an Electricity System Operator and a Gas System Planner licence
  • modifications to various licence conditions which will be impacted by the creation of NESO and the designation of the Independent System Operator and Planner (ISOP)

We are consulting on these 2 elements now because they werent covered in our previous consultation, and are required for theNESOs Day 1 licences.

We also provide:

This consultation brings together the outputs of multiple non-statutory consultations across NESO licences, new roles, financial design and incentives, and consequential changes to other licences.

It provides the complete proposed NESO Day 1 licence conditions, subject to the conclusion of this consultation.

How to respond

Please copy your responses to both:

Documents

Annex B: Reasons and effects

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