Competition in onshore electricity networks

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.