Consultation on NESO’s performance incentives framework for BP3

In April 2022, Ofgem and the Department for Energy Security and Net Zero (DESNZ) jointly decided to proceed with the creation of a new, independent system operator, known as National Energy System Operator (NESO).

We plan to introduce changes to NESO’s regulatory framework in phases. Under this phased approach, we have consulted on critical changes for ‘Day 1’ of NESO as soon as the organisation goes live.

We are now consulting on wider changes to our performance incentives framework for the business plan period commencing 1 April 2025 and ending 31 March 2026 (BP3). This will be our second phase of implementing the new NESO regulatory framework and will be the last business plan cycle within the RIIO-2 framework.

We plan to consult on changes to implement a more enduring regulatory approach at an appropriate later point prior to the 31 March 2026, when the RIIO-2 price control ends.

This consultation is open for 5 weeks, until 27 September 2024. Responses should be sent to FSO@ofgem.gov.uk and clearly marked where considered to be confidential.

Consultation on NESO’s performance incentives framework for BP3

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