NESO Performance Arrangements Governance Document
Summary
Ofgem publishes the governance document detailing how it will assess NESO's annual performance and apply financial incentives under the enduring regulatory framework. The document sets out the methodology for performance assessment, reporting requirements, and the mechanisms NESO must use to collect stakeholder feedback. This sits within the broader implementation of NESO's post-separation regulatory settlement.
Why it matters
The incentive structure for the system operator determines whether NESO optimises for throughput, cost efficiency, or stakeholder satisfaction. Getting these arrangements wrong means NESO faces the same Averch-Johnson problem as network companies: incentivised to spend rather than deliver.
Key facts
- •Published 31 March 2026 as part of NESO enduring regulatory framework implementation
- •Includes annual performance assessment methodology
- •Requires NESO to collect and discuss stakeholder feedback on its performance
- •Sets out reporting requirements on NESO
Timeline
Areas affected
Related programmes
Memo
NESO Performance Arrangements Governance Document | 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: NESO Performance Arrangements Governance Document Publication type: Guidance Publication date: 31 March 2026 Topic: National Energy System Operator (NESO) Print this page Related links Implementation of NESO's enduring regulatory framework Share the page Share on Facebook Share on Twitter Share on LinkedIn Guidance for the National Energy System Operator (NESO) setting out the detailed arrangements for their performance incentives. Details This Governance Document includes the process and methodology we use for our annual assessment of NESO’s performance and the associated reporting requirements on NESO. It also sets out the mechanisms NESO should use to collect and discuss stakeholder feedback on its performance. Documents NESO Performance Arrangements Governance Document [PDF, 351.23KB] Print this page Related links Implementation of NESO's enduring regulatory framework Share the page Share on Facebook Share on Twitter Share on LinkedIn Close