Categories
OFGEM

Decision on adjusting the Electricity Market Reform Delivery Body Incentives and mechanisms to recover uncertain costs.

On 11th March 2020, we published a statutory consultation on proposed modifications to National Grid Electricity System Operator’s (NGESO) Electricity Transmission Licence (Licence). We invited views on the proposed modifications to Special Condition 7D of NGESO’s Licence in respect of installing an Uncertainty Mechanism (UM) for funding adjustments, to fulfil its role as the Delivery Body (DB) for Electricity Market Reform (EMR), and Special Condition 4L regarding the removal of one of the incentives from NGESO’s incentive framework.

Having considered all responses to our statutory consultation, we have decided to proceed with the proposed modifications to Special Conditions 7D and 4L of NGESO’s Licence. The modifications to the Licence will enable an UM window in March 2021 to manage uncertain costs, and the removal of the Demand Side Response incentive from NGESO’s incentive framework for undertaking the role of the EMR DB.

The modifications to NGESO’s Licence are set out in Schedule 1 of the decision notice published on our website alongside this letter. The licence changes will come into effect 56 days from the date of publication of our decision on 01 August 2020.