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Gemserv’s response to the consultation on the Future System Operator

21st Oct, 2021

Gemserv is pleased to provide a response to the consultation on the Future System Operator (FSO).

Gemserv has a long history of providing services to the electricity and gas markets. We are currently providing code management services for the Smart Energy Code, Retail Energy Code and the IGT – UNC.

We agree there is a need to address the future role of the electricity and gas system operators as they will play a critical role in the transition to a decarbonised and more decentralised Net Zero energy system. The Net Zero energy transition will drive a dramatic change in both the energy mix and in the numbers and types of market participants, with customers becoming increasingly more active in energy markets.

In summary, our response is strongly supportive of the need for code governance reform so that it can be fit for purpose to meet the future challenges of a Net Zero energy sector. We support Option 1, which proposes Ofgem as a strategic body with separate licenced code managers, selected by competitive tender. We do not support the FSO being the strategic oversight body for codes nor the integrated code body.

  • Scope of reform – we support that the scope of reform should include a) all existing industry codes plus engineering standards, and b) all delivery roles including those performed by the FSO, Xoserve, Elexon, DCC, and Electralink.
  • Strategic direction – we agree the BEIS/Ofgem preferred model that Ofgem should be the designated strategic body and should licence Code Managers.
  • Code Manager selection – we urge that all code management and delivery functions should be competitively tendered, and performance incentivised.
  • Implementation – we support code consolidation as part of drafting new licences and competitive tenders. We consider that merging gas and electricity codes should be a priority.

We consider that the proposed FSO institutional reforms should align closely with the objectives of the code reform, creating an entity that is forward-looking, agile, and enabling greater market participation.

Read our full Consultation response

If you would like to read the rest of our consultation response, then click on the link below:

Authors

Nigel Wilkinson

Head of Energy Consulting

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