The Secretary of State (SoS) for the Department for Energy Security and Net Zero (DESNZ) and the Gas and Electricity Markets Authority (GEMA) have decided to establish the National Energy System Operator (NESO). Changes to the BSC are required to implement the SoS and Ofgem’s decision.
Formal title: National Energy System Operator and Elexon Ownership
On 13 September 2024, the Secretary of State for Energy Security and Net Zero and the Gas and Electricity Markets Authority published a Decision Notice (see below) regarding modifications to the BSC as a consequence of its decisions to:
- Establish Independent System Operator and Planner (“ISOP”); and
- Designate the National Grid Electricity System Operator Limited (to be renamed National Energy System Operator Limited) as the ISOP on and with effect from 1st October 2024.
The Decision Notice sets out a number of decisions in connection with establishing the Independent System Operator and Planner (ISOP) and designating National Grid Electricity System Operator Limited (NGESO) (to be renamed National Energy System Operator Limited) as the ISOP on and with effect from 1st October 2024.
Further to previous consultations and response documents published by DESNZ and Ofgem, the BSC shall be updated, effective from 1 October 2024, to give effect to these decisions. The power to modify the BSC is granted under the Energy Act 2023.
The decisions that affect BSC Parties are:
- the decision by the Secretary of State to modify the BSC in relation to change of ownership of Elexon. The related sections of the Decision Notice are paragraph [3(a)] and Annex [A1].
- the decision by the Secretary of State to implement changes to the Codes that are required for the ISOP to comply with directions issued by the Secretary of State where, in the opinion of the Secretary of State, there is a risk relating to national security that may detrimentally impact the resilience, safety or security of the energy system, or the continuity of essential services. The related sections of the Decision Notice are paragraph [10(a)] and Annexes [E1-E8].
- the decision by GEMA to implement all other changes to the Codes (and in the case of the BSC, code subsidiary documents), excluding those made by the Secretary of State, to ensure they are coherent with the establishment of the ISOP and changes to the regulatory framework in accordance with its statutory functions, duties and licence conditions. The related sections of the Decision Notice are paragraph [10(b)] and Annexes [E1-E8].
Below you can find the Direction Notice and a letter from DESNZ and Ofgem.
More information can be found at the “Decision Notice” page accessible through the following Ofgem webpage at https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/future-system-operation-fso