Increasing competition in the markets we operate

At the ESO we have an ambition to enable more competition across the markets that we operate so that together, we can unlock millions of pounds in consumer value and continue to progress towards GB’s net zero goal. 

We believe our ambition for "competition everywhere" is a fundamental piece of the puzzle that will help us to achieve our mission of enabling the transformation to a sustainable energy system and ensuring the delivery of reliable, affordable energy for all consumers.

The electricity markets are growing and diversifying at rapid pace. With technologies advancing and new business models being developed, it is vital that we create an environment where all market participants can compete on a level playing field to provide solutions to network challenges.

To successfully promote competition, we need to make sure that the right frameworks and platforms are in place, and that smaller market players feel that they have the support and information they need to compete against the larger market players. Opening markets will spur innovation and drive competition, translating into lower bills for consumers.

We are currently undertaking a variety of different activities that are aimed at increasing competition. For example, the work we have done on widening access to the balancing mechanism, the launch of a new suite of frequency response services and the new markets we are creating through our pathfinders for stability, voltage and constraints.  

Competition in networks.

As part of our competition everywhere ambition, we fully support an approach that incorporates further competition in networks to increase innovation and drive cost efficiency. The pathfinder projects that we are running introduce competition into network development for the first time - they form part of our Forward Plan deliverables.

We support the ongoing development of competition in onshore transmission. Ofgem requested[1] the ESO develop an Early Competition Plan to look at how models of early competition could be used for the design, build and ownership of transmission assets. Early competition is where the competition takes place before a detailed design solution occurs. The benefit of this is that there is more scope for innovation to happen and therefore a larger potential for consumer cost savings.

If you are interested in finding out more, we have recently published our Early Competition Plan – Phase 1 Update. We are also hosting a webinar on 3 March – you can sign up here.

[1] https://www.ofgem.gov.uk/publications-and-updates/electricity-system-operator-s-early-competition-plan-letter