Competition in onshore electricity networks
Applies to England, Scotland and Wales
Download the full outcome
Detail of outcome
Against the background of a rapidly evolving electricity system, we committed in the Energy White Paper 2020 to legislate to enable competition in onshore electricity networks. Taking account of this evolving landscape, we are creating a competitive framework which can be adapted to suit the system needs. The Energy Security Bill sets out the legislative measure that the government is proposing to enable this.
This consultation focused on how the competitive framework will be implemented in the electricity network market. In the government response we set out our decisions.
Since the consultation closed, government also set out in the British Energy Security Strategy that certain infrastructure will be exempt from the introduction of onshore competition. This will ensure that, in the period of transition to a competitive process for network delivery, our progress towards our energy security and decarbonisation objectives does not slow down. We elaborate on this commitment in our response.
Detail of feedback received
We received 31 responses to this consultation, from a range of stakeholders, including:
- network companies
- developers
- generators
- investors
Many responses were comprehensive and discussed a variety of issues that impact the introduction of onshore competition. This included comments on:
- the need for certainty
- how competition impacts on the electricity system as a whole
- how early-model competition will work in practice
Original consultation
Consultation description
At present, the incumbent electricity network companies are responsible for building, owning and operating electricity network infrastructure, ensuring it is ready to meet the demands placed on it. Ofgem regulates electricity network companies to do this efficiently in the best interests of consumers through a system of price controls. This system of responsibilities has broadly worked well, but we need to consider whether more can be done to foster innovative and efficient solutions to the emerging challenges of new technologies as we move towards net zero.
Opening up electricity network ownership and operation to third parties will allow for new, innovative parties, with access to different sources of capital, to invest in our network infrastructure. It creates a new market, bringing with it potential for new, green jobs across all of Great Britain, while economies of scale and competitive forces should drive efficiency and lower costs for consumers. Consumers are at the heart of government policy relating to energy, and this policy will be a key to ensuring the necessary infrastructure investment needed to meet net zero does not unduly add costs to consumers.
The 2020 Energy white paper reconfirmed the government’s intention to introduce the necessary primary legislation to enable this.
This consultation provides an update on the principles and fundamental policy and discusses the more detailed policy and process issues that will need to be addressed as and when the new, more competitive regime moves towards implementation. It seeks views on:
- the practical implementation of competition
- factors considered by the Secretary of State when appointing a body to run competitions
- criteria for competitions
The consultation is underpinned by the supporting impact assessment.
We anticipate that it will be of particular interest to:
- electricity network companies, such as Transmission Owners and Distribution Network Operators
- potential new market participants in network competitions
- consumer interest groups
See the BEIS consultation privacy notice.
Please do not send responses by post to the department at the moment as we may not be able to access them.
Documents
Last updated 4 August 2022 + show all updates
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Government response published.
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First published.