Consultation outcome - Future ownership of Elexon:
licence and code changes
From:
Department for Energy
Security and Net Zero and Ofgem
Published 24 January 2024
Last updated 21 August 2024 — See all updates
This consultation has concluded
Read the full outcome
Future ownership of Elexon: new
electricity supply and generation licence conditions and
Balancing and Settlement Code changes: government and Ofgem
response
PDF, 382
KB, 46 pages
Elexon consultation government
response: Appendix 2 Amended Balancing and Settlement Code -
Section C BSCCo and its subsidiaries
PDF, 834
KB, 81 pages
Elexon consultation government
response: Appendix 2 Amended Balancing and Settlement Code -
Section X-1 General glossary
PDF, 985
KB, 80 pages
Elexon consultation government
response: Appendix 2 Updated Elexon Articles of
Association
PDF, 384
KB, 33 pages
Detail of outcome
The implementation of Elexon's new ownership structure will
involve modifying electricity supply and generation licences to
enable the Secretary of State and the Gas and Electricity Markets
Authority to direct parties to hold a share in Elexon. The
Balancing and Settlement Code (BSC) will be modified, as
needed, to support implementation of the new ownership
arrangements. These modifications will be made using powers in
the Energy Act 2023, sections 169 and 170, subject to the
Secretary of State deciding to proceed with the establishment of
the National Energy System Operator (NESO).
This joint Department and Ofgem response sets out our conclusions
about the modifications to be made to implement the Elexon
ownership change, outlining additional detail and clarifications
that have been added to the Elexon ownership statement of policy,
licence conditions, and code text, based on the responses to the
consultation.
We will publish a separate decision notice about the licence and
code changes related to the future ownership of Elexon, once the
Secretary of State has reached a decision.
Detail of feedback received
We received 11 responses from a mix of generators and suppliers
(including companies which have both electricity supply and
generation licences) and other industry parties.
The responses were generally supportive of the proposed changes
to the licence and code needed to implement the ownership change.
Some respondents requested clarity on aspects of the policy, for
example on how the shareholder cohort will be ‘topped up' in the
future.
Original consultation Summary
We're seeking views on proposals for new licence conditions and
code changes to implement the new ownership arrangements for
Elexon.
This consultation ran from midday on 24 January
2024 to 11:59pm on 21 February 2024
Consultation description
This consultation seeks views on our proposals for the new supply
and generation licence conditions and changes to the Balancing
and Settlement Code (BSC) required to implement
the new ownership arrangements for Elexon.
It also sets out wider policy decisions relating to the ownership
of shares in Elexon, to provide supporting guidance and context
for the proposed modifications.
The March 2023 government and Ofgem
response set out our decision that Elexon will remain an
industry body with its shares held by a subset of the industry
parties that fund it.
The creation of the Future System Operator (FSO) as a public corporation and
the associated purchase of National Grid Electricity System
Operator (NGESO)
necessitate a change in ownership for Elexon, because Elexon is
currently wholly owned by NGESO.
We will make the changes to the ownership structure, licence
conditions and code using powers in the Energy Act 2023. The
changes involve:
- reflecting the change of ownership in the BSC, which sets out rights
and responsibilities of the shareholders, management of the
allocation and transfer of shares, and treatment of liabilities
- creating new licence conditions to enable the Secretary of
State and the Gas and Electricity Markets Authority to direct
relevant parties to hold a share in Elexon
Read our consultation privacy
notice.
Responding by email
This consultation is held jointly with Ofgem. Please copy your
responses to both addresses:
futuresystemoperator@energysecurity.gov.uk
and
FSO@ofgem.gov.uk
Documents
Future ownership of Elexon:
licence and code changes
PDF, 317
KB, 30 pages
Appendix 4: Legal text for
Elexon ownership change - Section C of the BSC
PDF, 880
KB, 78 pages
Appendix 4: Legal text for
Elexon ownership change - Section X-1 of the BSC
PDF, 964
KB, 78 pages
Appendix 4: Legal text for
Elexon ownership change - Elexon Articles of
Association
PDF, 485
KB, 24 pages
