Consultation outcome

The future ownership of Elexon

From:: Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy
Published: 14 July 2022
Last updated: 23 March 2023 — See all updates

Read the full outcome

Elexon Ownership: government and Ofgem response

PDF, 354 KB, 28 pages

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Detail of outcome

The Elexon Ownership consultation set out the rationale for considering the future ownership of Elexon due to the establishment of the Future System Operator. It sets out the criteria the decision will be taken against, as well as government and Ofgem’s preferences. The consultation was published in June 2022 and closed in September 2022.

The government / Ofgem’s response to this consultation sets out a summary of responses, and our key decisions, including for Elexon to remain in industry ownership.

The key decisions taken are as follows:

Elexon will remain in industry ownership
the 13 largest energy suppliers and generators will be mandated to take on shares in Elexon
the temporary fallback option whereby Elexon will become a public body is retained
these policies will be implemented through license and code changes

The response also sets out the analysis to reach this position, as well as the next steps towards implementation.

Detail of feedback received

We received 28 responses to the consultation from a range of organisations:

primarily from the energy industry - generators, suppliers, traders, system bodies
trade organisations
consumer interest groups

During the consultation period we also held a webinar and question and answer session, and several small sessions for particular groups of industry parties.

Original consultation

Consultation description

BEIS and Ofgem are jointly consulting on proposals for the future ownership of Elexon.

Elexon is a wholly owned but operationally independent subsidiary of National Grid Energy System Operator (NGESO). It is governed by its own Board and by the Balancing and Settlement Code (BSC) Panel (which is made up of industry, consumer, and independent experts). Elexon plays a key role in the electricity market, with its main roles being to administer the BSC and to carry out the settlement of imbalances between predicted and actual electricity generation and use.

It is the future purchase of NGESO to create the Future System Operator (FSO) that necessitates consideration of the ownership of Elexon. To ascertain what the best ownership model is, we need to carry out a consultation.

This document follows on from the consultation regarding the FSO, and the recent response, which included a question concerning Elexon.

The document sets out criteria against which ownership options are compared, and the 2 ownership options that meet the criteria, public ownership and industry ownership. We also consider:

government and Ofgem’s preferred ownership option for Elexon
a temporary fallback option in the case of the industry ownership option being chosen, but where implementation of it could cause a delay to the FSO being established
potential combinations of BSC parties which could own Elexon under the industry ownership option

Proposed license and code changes associated with each of the two ownership options.

Read the BEIS consultation privacy notice.

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