ESO submits RIIO-2 Sector Specific Methodology consultation response

In April 2021, the Electricity System Operator (ESO) will have its own regulatory framework and price control, and this month saw an important milestone in the RIIO-2 process; as the ESO submitted its response to Ofgem’s RIIO-2 Sector Specific Methodology consultation.

In this consultation, Ofgem had laid out its initial thinking on how to design the price control for the ESO. So, what did we say?

First, we welcome Ofgem’s decision to introduce a bespoke price control for the ESO. RIIO-2 is a unique opportunity to harness the legal separation of the ESO and deliver a regulatory framework appropriate for an ambitious and innovative organisation at the heart of our energy system.

However, we have proposed some specific changes on a number of key topics to achieve the desired outcomes for the funding model, incentives and length of the price control.

The ESO’s RIIO-2 Framework should enable us to be financially resilient and drive ambitious benefits for consumers and stakeholders across the energy system.

Enlarge image

For more details, you can read our full response. Ofgem will be publishing a decision document in May and we will be engaging with them regularly before then to discuss our proposals.