The future ownership of Elexon: new electricity supply and generation licence conditions and Balancing and Settlement Code (BSC) changes - government and Ofgem policy response to consultation
Consultation
Publication date
Company
Industry sector
- Supply and Retail Market
- Generation and Wholesale Market
- Distribution Network
- Transmission Network
Related links
- Department for Energy Security and Net Zero - Future ownership of Elexon: licence and code changes
- Consultation on supply and generation licence conditions to implement new ownership arrangements for Elexon
- Elexon ownership - Government and Ofgem’s response to consultation
- Future Elexon ownership consultation
The Department for Energy Security and Net Zero (the Department) and Ofgem have today published a Government and Ofgem policy response to our joint statutory consultation on new electricity supply and generation licence conditions and Balancing and Settlement Code (BSC) changes to support the future ownership of Elexon, published on 24 January 2024.This response sets out our analysis and consideration of responses and our policy conclusions. When and if the decision to change Elexon’s ownership is made, the Secretary of State will modify the electricity generation and supply licence conditions and the BSC as well as the form of Elexon’s Articles of Association.
Please note that this document is not a notice of decision. These decisions will be subject to the Secretary of State deciding to proceed with the establishment of the National Energy System Operator (NESO).
We have also published the non-confidential responses to the 24 January 2024 joint statutory consultation on supply and generation licence conditions to implement new ownership arrangements for Elexon. See link to these responses at the bottom of this page.
In July 2022, the Department and Ofgem published a joint consultation on the future ownership of Elexon. This followed the April 2022 decision to create NESO (previously known as the Future System Operator (FSO)) that would take on existing roles of the National Grid Electricity System Operator (NGESO).
In March 2023, the Department and Ofgem published their response to the July 2022 consultation on the future ownership of Elexon, which set out the following decisions:
- Elexon will remain in industry ownership;
- the shares in Elexon will initially be transferred to the 13 licensed Balancing and Settlement Code (BSC) funding parties with a greater than 2% funding share in Elexon as of 1 January 2023; and
- the implementation of these policies would be supported by licence and code changes.
In September 2023, the Department and Ofgem published a consultation on new electricity supply and generation licence conditions related to new ownership arrangements for Elexon. These arrangements were to support implementation of the decision on future ownership of Elexon, and to provide for the Secretary of State or the Gas and Electricity Markets Authority (the Authority) to direct relevant licensees to hold a share in Elexon. This was the first stage of a two-stage consultation on new licence conditions. In tandem, Elexon published an informal consultation on changes to the Balancing and Settlement Code (BSC) dealing with related aspects of Elexon ownership including rights and responsibilities of the shareholders, management of the allocation and transfer of shares and treatment of liabilities.
On 24 January 2024, the Department and Ofgem published a joint statutory consultation on the Future Ownership of Elexon setting out proposed licence and code changes to support implementation of new ownership arrangements for Elexon. This consultation drew on responses to previous consultation related to Elexon ownership.
On 24 January 2024 we also published the non-confidential responses to the September 2023 consultation on supply and generation licence conditions to implement new ownership arrangements for Elexon.
If you would like any more information, please email FSO@ofgem.gov.uk noting ‘Elexon ownership’ in the subject title.