Modifications to the Electricity System Operator Licence: Early Competition in Onshore Electricity Transmission

Details of outcome 

Early competition in onshore electricity transmission introduces a competitive tender process to appoint a Competitively Appointed Transmission Owner (CATO) to design, finance, build and operate assets on the electricity transmission network. 

In May 2025 we consulted on introducing a new licence condition governing NESO’s role as delivery body for onshore competition. This decision sets out our final view on the required modifications to the Electricity System Operator (ESO) licence required to formalise NESO’s role in its licence. 

These modifications introduce obligations relating to the submission of tender documentation for approval by Ofgem, the provision of information to bidders, compliance with the Onshore Competition Information Exchange Guidance, and requirements to conduct Onshore Transmission Tender Exercises in an efficient and effective manner. 

Read the full outcome

Original consultation

Early competition in onshore electricity transmission is a competitive tender process to appoint a Competitively Appointed Transmission Owner (CATO) to design, finance, build and operate assets on the electricity transmission network.

In April 2025, we published our 'Decision on the Electricity (Early-Model Competitive Tenders for Onshore Transmission Licences) Regulations 2025', referred to as the Tender Regulations, which establish the roles, responsibilities and process governing onshore transmission tender exercises. 

This statutory consultation sets out proposed modifications to the National Electricity System Operator’s (NESO) licence to implement new licence obligations arising from its role as the delivery body of a tender exercise run under the Tender Regulations.

This includes obligations in respect to the submission of Tender Documentation for approval by Ofgem, the provision of information to bidders, compliance with the new Onshore Competition Information Exchange Guidance and requirement to conduct an Onshore Transmission Tender Exercise in an efficient and effective manner.