Ofgem publishes preliminary conclusions on incentive scheme for National Grid

The GB energy markets regulator, Ofgem, has today published its preliminary conclusions from the first phase of its review of the way in which the British electricity transmission system operator, National Grid, is incentivised.  The report concludes that new approaches to incentivising National Grid should be introduced so that uncontrollable and unpredictable external factors, such as the level of the wholesale electricity price, are more effectively excluded from the regime than they are at present.

Frontier (Europe) was commissioned jointly by National Grid and Ofgem to investigate the current approach to regulating National Grid's system operator function.  Ofgem’s preliminary conclusions paper draws extensively on the findings set out in Frontier’s report, which was also published today as an appendix to the paper.

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