City Research Online

Abstract

The ESO will be legally separated from the National Grid Plc in April 2019. This change in governance is necessary to reflect the fast changes in the environment of the SO including smaller scale generation, intermittent sources of supply, distributed generation, demand side response, storage as well as increases in demand resulting from electric vehicles and electrification in transport. The ESO should balance the transmission system in the most cost efficient way, by removing information asymmetries, promoting competition through encouraging participation of existing and new participants into the market in a transparent way. To ensure that this happens the ESO needs to operate without any conflict of interests in terms of transmission assets infrastructure. Ofgem has decided that this legal separation necessitates that the ESO will get its own specific licence. This decision is correct. Depending on the experience of the success of the ESO to achieve the roles listed above following this separation, it may be needed to further this into an ownership separation.

Publication Type:	Report
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
Departments:	School of Policy & Global Affairs > Economics

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