Decision

Designation of the National Energy System Operator (NESO)

Decision made under Energy Act 2023 on change of Elexon ownership, transfer of Electricity System Operator (ESO) into public ownership, and licensing and designation of NESO.

From:
Department for Energy Security and Net Zero and Ofgem
Published
13 September 2024

Documents

National Energy System Operator and Elexon: Decision notice

HTML

Electricity System Operator: Direction and Licence Terms and Conditions

PDF, 2.63 MB, 301 pages

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Gas System Planner: Grant and Licence Terms and Conditions

PDF, 813 KB, 128 pages

Details

The Energy Act 2023 established the legislative framework for creating and regulating the National Energy System Operator (NESO), and transferring ownership of the Electricity System Operator (ESO) and Elexon.

The National Energy System Operator (NESO) will be an independent, expert, impartial body with new roles across electricity and gas.

The attached Decision Notice contains and gives the requisite notice of the final decisions, made using powers in the Energy Act 2023, that are required to be published. The decisions all come into effect on 1 October 2024 at 00.00 hours.

As part of the Decision Notice the Secretary of State makes and notifies several decisions connected to the establishment of NESO and transfer of Elexon, including: 

  • make the Electricity Licensing Direction (that is, to ‘convert’ NGESO’s current transmission licence to NESO’s Electricity System Operator Licence)
  • grant the new Gas System Planner Licence to NESO 
  • make certain modifications to existing industry licences and codes
  • designate NESO as the Independent System Operator and Planner under the Energy Act 2023  

The Decision Notice also gives notice of Ofgem’s related decisions to further modify industry codes. 

Background to this decision

Several consultations have fed into the establishment of NESO:

and the future ownership of Elexon:

Third Party Compensation Regulations 2024

The Independent System Operator and Planner (Designation) Third Party Compensation Regulations 2024 set out further information about eligibility and the process for any directly impacted third parties to make a claim for compensation.

Updates to this page

Published 13 September 2024

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