From: Department for Business,
Energy & Industrial Strategy
Against the background of a rapidly evolving electricity system,
we committed in the Energy White Paper
2020 to legislate to enable competition in onshore
electricity networks. Taking account of this evolving landscape,
we are creating a competitive framework which can be adapted to
suit the system needs. The Energy Security
Bill sets out the legislative measure that the
government is proposing to enable this.
This consultation focused on how the competitive framework will
be implemented in the electricity network market. In the
government response we set out our decisions.
Since the consultation closed, government also set out in
the British Energy Security
Strategy that certain infrastructure will be exempt from
the introduction of onshore competition. This will ensure that,
in the period of transition to a competitive process for network
delivery, our progress towards our energy security and
decarbonisation objectives does not slow down. We elaborate on
this commitment in our response.
Detail of feedback received
We received 31 responses to this consultation, from a range of
stakeholders, including:
- network companies
- developers
- generators
- investors
Many responses were comprehensive and discussed a variety of
issues that impact the introduction of onshore competition. This
included comments on:
- the need for certainty
- how competition impacts on the electricity system as a whole
- how early-model competition will work in practice
Download the full outcome
Government response to
consultation on competition in onshore electricity
networks
PDF, 474
KB, 53 pages
Original consultation Summary
We're seeking views on details related to the introduction of
competition to onshore electricity networks.
This consultation ran from 10am on 3 August
2021 to 11:45pm on 26 October 2021
Consultation description
At present, the incumbent electricity network companies are
responsible for building, owning and operating electricity
network infrastructure, ensuring it is ready to meet the demands
placed on it. Ofgem regulates electricity network companies to do
this efficiently in the best interests of consumers through a
system of price controls. This system of responsibilities has
broadly worked well, but we need to consider whether more can be
done to foster innovative and efficient solutions to the emerging
challenges of new technologies as we move towards net zero.
Opening up electricity network ownership and operation to third
parties will allow for new, innovative parties, with access to
different sources of capital, to invest in our network
infrastructure. It creates a new market, bringing with it
potential for new, green jobs across all of Great Britain, while
economies of scale and competitive forces should drive efficiency
and lower costs for consumers. Consumers are at the heart of
government policy relating to energy, and this policy will be a
key to ensuring the necessary infrastructure investment needed to
meet net zero does not unduly add costs to consumers.
The 2020 Energy white
paper reconfirmed the government’s intention to
introduce the necessary primary legislation to enable this.
This consultation provides an update on the principles and
fundamental policy and discusses the more detailed policy and
process issues that will need to be addressed as and when the
new, more competitive regime moves towards implementation. It
seeks views on:
- the practical implementation of competition
- factors considered by the Secretary of State when appointing
a body to run competitions
- criteria for competitions
The consultation is underpinned by the supporting impact
assessment.
We anticipate that it will be of particular interest to:
- electricity network companies, such as Transmission Owners
and Distribution Network Operators
- potential new market participants in network competitions
- consumer interest groups
See the BEIS consultation privacy
notice.
Please do not send responses by post to the department at the
moment as we may not be able to access them.
Documents
Competition in onshore
electricity networks
PDF, 399
KB, 39 pages
Extending competitive
tendering in the GB electricity network: impact
assessment
PDF, 1.05
MB, 62 pages
