Informal Consultation on the BSC changes needed to enable Elexon’s ownership change

Outcome

The DESNZ has reviewed the responses to this informal Consultation and Elexon’s commentary below and has added its own commentary, as appropriate, where they consider that the comments relate to their policy on Elexon ownership.

Using powers under the Energy Act 2023, the Department and Ofgem will in due course formally consult on the proposed BSC modification, which will, in turn where appropriate, take account of the responses received to the informal consultation.

Alongside this, we have also published, for transparency, our response to questions from Scottish Power, which were outside the scope of the informal consultation (in that they relate to provisions of the Code and Articles of Association that we do not believe are impacted by the change of ownership).

Original consultation

Who will this impact?

Elexon’s ownership is expected to potentially impact all BSC Parties, particularly the 13 licensed BSC Parties that will become the initial shareholders.

What is proposed?

DESNZ and Ofgem have announced their commitment to establish the Future System Operator (FSO), which will supersede the Electricity System Operator (ESO), currently provided by NGESO. The FSO will be a new expert, impartial body that will be responsible for operating and planning the electricity and gas networks. Elexon is an independent entity wholly owned by NGESO, our only shareholder currently.

Following a consultation, DESNZ and Ofgem released a decision in March 2023 confirming that Elexon would remain in private ownership with the  sector. Shares in Elexon are to initially be transferred to the 13 licensed BSC funding parties with a greater than 2% funding share in Elexon as of 1 January 2023. 

There will need to be further changes to the BSC to facilitate the establishment of the FSO. This consultation, along with the associated legal text, concerns only the changes to Elexon’s ownership.