Mid-scheme decision on ESO's BP2 performance
Summary
Ofgem mid-scheme decision on the Electricity System Operator's BP2 performance. Made before the NESO transition; assesses National Grid ESO's performance under the Business Plan 2 framework.
Why it matters
Historical performance assessment for the predecessor ESO. Informed the transition to NESO; revealed strengths and weaknesses in the legacy incentive structure that BP3 had to address. Useful baseline for judging NESO performance evolution.
Areas affected
Memo
Mid-scheme decision on ESO's BP2 performance | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Mid-scheme decision on ESO's BP2 performance Publication type: Decision Publication date: 30 August 2024 Topic: Electricity transmission Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn In April 2021, we introduced the RIIO-2 price control for the Electricity System Operator (ESO) covering the period between 2021-26. We introduced a pass-through funding approach, supported by incentives to deliver value for money. The incentives framework runs over a two-year period (aligning with the business plan period). We evaluate the ESO’s combined performance on outputs and costs, across three distinct roles and the incentives provide the ESO with additional returns where the ESO has delivered exceptional performance. This is Ofgem's decision on the ESO's performance during BP2 at the mid-scheme point. Cost Monitoring Framework In our Business Plan 2 Final Determinations - Electricity System Operator document we introduced the Cost Monitoring Framework. As part of this framework we set out our intention to reassess the ESO’s IT at the mid-scheme stage using a Red Amber Green rating to determine whether there were any areas of significant concern in the ESO’s delivery and governance processes. We have commissioned Coforge Ltd to perform this assessment. Following engagement with Coforge and the ESO we have opted to move away from a Red Amber Green assessment approach to a more nuanced scoring based approach. This approach maintains the same assessment criteria used in the initial RAG assessment performed by Zuhlke Engineering Ltd in 2022 but rather than a single Red Amber Green status, a score based on Capability, Maturity and Confidence was created for each investment and the wider Portfolio as a whole. Details of this scoring approach can be found in Coforge's BP2 mid-scheme review of ESO Digital Data and Technology performance. Main document BP2 midscheme review of ESO performance [PDF, 144.90KB] Subsidiary documents BP2 midscheme review of ESO EMR delivery body performance [PDF, 96.97KB] Coforge's BP2 midscheme review of ESO Digital Data and Technology performance [PDF, 10.41MB] Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close