New System Operator Incentives

By USGBC MA Communications

New technologies and models of power generation and distribution promise great benefits for consumers and society. As GB’s electricity system operator (ESO), National Grid is keen to hear from customers and bill-payers about the best way to make sure that we deliver on our commitments.

Audrey Ramsay, Future Operability and Incentives Manager, Commercial, Electricity.

Ofgem is the regulator for the ESO and sets us incentives that mimic the forces of a competitive market. This helps to make us more efficient and innovative, resulting in better standards of service for customers and ultimately bill payers.

We’re due a new regulatory and incentives framework from April 2018 that will run to 2021.

Last July, Ofgem set out its thoughts on this new framework and asked for feedback. We held three ‘rapid development’ workshops with subject matter experts (SMEs) from around National Grid to frame our proposals to Ofgem for its consultation.

We’ve published these proposals as 12 outline work packages, with associated incentives. Our purpose in doing this is to show how we could meet the requirements of our enhanced System Operator role by carrying out extra incentivised activities alongside our core functions as ESO.

We’re keen to hear what our customers and bill-payers think of them. What they tell us will inform our submission to Ofgem during its statutory consultation period this autumn. Ofgem will then publish its proposed changes to the ESO licence by the end of 2017.

As Ofgem set out in its working paper, the 2018-21 period could be a time to try new, innovative approaches to regulation that could potentially form part of a more enduring regime after 2021.