Decision to grant NESO a derogation for Net Transfer Capacity restrictions under Licence Condition C9.6
- Publication type:
- Decision
- Publication date:
- Topic:
- Electricity transmission,
- Energy licences and guidance,
- National Energy System Operator (NESO)
Our decision to grant NESO a derogation under Electricity System Operation (ESO) Licence Condition C9.6, and issue two further directions under ESO Licence Condition C9.5.
Details
NESO requested a derogation to Electricity System Operation (ESO) Licence Condition C1.17 on 24 July 2026. The request sought approval to continue allowing them to procure a non-frequency balancing service, Net Transfer Capacity (NTC) restrictions, following non-market-based procedures.
Our decision grants NESO a derogation under ESO Licence Condition C9.6, allowing NESO to continue procuring NTC restrictions using non-market-based procedures where necessary. In reaching this decision, we considered NESO’s request, the current arrangements for the NTC Commercial Compensation Methodology (CCM), the GB NTC Calculation Policy, and whether feasible alternatives to NTC restrictions were available at this stage. We have decided to grant the derogation until 30 September 2030.
Alongside this decision, we have also issued two Directions under ESO Licence Condition C9.5 requiring NESO to review the CCM and the GB NTC Calculation Policy. These Directions reflect that there remain areas where further value could be delivered for stakeholders, and where greater evidence and transparency are needed to support the NTC regime.