Table 6 Summary of network arrangements in Great Britain
Institutional
arrangements
Transmission
planning and delivery
Network pricing
Modernising
network
arrangements
Institutional model:
 NG is the TSO in
England and
Wales (sole TO)
and an ISO in
Scotland (where
two other firms
are TOs)
 Regulated under
RIIO PBR
(revenue =
incentives +
innovation +
outputs
performancebased regulation)
 Great Britain is
moving towards
the ISO model
Additional SO
functions:
 NG is a delivery
body in CFDs and
the capacity
market as part of
EMR
Planning:
 Historically, onshore
investment has been
planned by NG, with
wind farm developers
responsible for
offshore planning
 Going forward,
under Ofgem’s ITPR,
NG will plan and
recommend
investment projects
in its role as SO
Delivery:
 NG develops and
operates new onshore
assets; offshore
assets are developed
by generators, and
divested to OFTOs
 NG is part of ENTSOE, which coordinates
planning across
European TSOs
Investment regime:
 Merchant involvement
to date has been
limited
 However, Ofgem is
developing a
competitive tendering
framework which will
include a larger role
for merchants
 Interconnectors are
co-owned by NG and
overseas partners
 No nodal or
zonal pricing
 TNUoS charges
have a small
locational
component
 Wholesale
electricity prices
are updated on
half-hourly basis
Readiness for
decarbonisation:
 Strategic
generation zones
ensure
coordinated
investment in
offshore
generation and
supporting
onshore networks
 Reforms
underway to
reward flexible
resources for
system services
Readiness for
decentralisation
 ENA, the industry
body for network
owners and
operators, started
the Open
Networks Project
to support the
DNO to DSO
transition and
better coordinate
TSO and DSOs
Note NG = National Grid; Ofgem = the Office of Gas and Electricity Markets (UK regulatory body); TNUoS charges = transmission network
use of service charges, ENA = Energy Networks Association.
Source Vivid Economics
Special Report 1: A Study of China’s Energy Supply Revolution
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