Consultancy report on future regulation and remuneration of the electricity system operator

Publication date
27th July 2018
Information types
Policy areas

The Electricity System Operator (ESO) is transitioning to a more asset-light and service-focused entity as we legally separate the ESO from National Grid’s transmission owner function in April 2019. Linked to this is the future of the ESO price control and whether we separate the ESO price control from NGET’s TO price control at the end of the RIIO-T1 period (with effect from April 2021). We have begun thinking about what a separate ESO price control could look like and have recently appointed the economics consultancy Reckon LLP to carry out a desk-based review of potential models and considerations for the regulation and remuneration of the ESO.

This report is Reckon’s view on potential high level options and considerations for a separate ESO price control. Please note this document does not represent the views of Ofgem. This is intended to provide input into our thinking and an opportunity to begin exploring potential options.