Elexon’s response to Ofgem consultation ESO regulatory and incentives framework

Summary

Ofgem proposes that the evaluation moves from a ‘per Principle’ evaluation in 2018/19 to a ‘per Role’ evaluation for the 2019/2020 evaluation.

Elexon believe that this move will give more flexibility to the ESO to allocate its resources and expenditure to areas where improvements will be most valuable to consumers.

However, it will also give more flexibility to the ESO to allocate its resources where it is most cost-beneficial to ESO itself, i.e. to the easier or least costly to meet targets within each role.

For that reason we continue to support both ensuring that the overall incentive is addressed to maximise end consumer benefits and that there is transparency in the detail of ESO expenditure as was proposed by Ofgem in its earlier call for input on the 2019-20 ESO regulatory and incentives framework.

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