Network unbundling meaning

Background—the First to Fifth Energy Packages Under Article 194 of the Treaty on the Functioning of the European Union (TFEU), the Member States have, among other matters, granted the EU powers to ensure the operation of the energy market, protect security of energy supply, advance energy efficiency and saving and the development of novel and renewable energy forms, and support the interconnection of national energy networks. Article 194 further requires the European Parliament and the Council to adopt the measures needed to realise these goals. Accordingly, since the 1990s, a sequence of legislative packages has been enacted to create a shared EU-level rulebook to open national energy markets. These are set out below: First Energy Package — adopted between 1996 and 1998, initiating the first liberalisation of national energy markets Second Energy Package — adopted in 2003, enabling industrial and domestic customers to choose their energy suppliers from a broader field of competitors Third Energy Package — adopted in 2009, introducing: ...

What are OFTOs? Offshore Transmission Owners (OFTOs) hold and operate the offshore transmission assets that link offshore wind farms to the mainland electricity system. These assets span the full chain from the offshore interface with the generating wind farm through to the onshore grid connection point, and include all cables and related connection equipment. Commonly, the assets comprise any offshore platforms and linked substations, export cables, the onshore substation, and the onshore cable routes to the Distribution Network Operator substation. For details on the various participants in the Great Britain (GB) onshore and offshore transmission landscape, and how they sit within the broader GB electricity market, see Practice Note: The Great Britain electricity market—an introduction. Introduction to the OFTO regime The legislative framework In 2011, the EU Third Energy Package was transposed into UK law via the Electricity and Gas (Internal Markets) Regulations 2011 (2011 Regulations), SI 2011/2704, establishing ‘ownership unbundling’. This requires the separation of transmission system ownership and operation from gas and electricity generation,...

For a thorough exploration of the oversight, consenting and incentivisation of the net zero transition under the laws of England and Wales, see also: Collinson and Hockman on Energy Law: Regulating, Consenting and Incentivising the Energy Transition. That textbook provides extensive treatment of matters addressed in this Practice Note... Quick links If you are focused on particular elements of the developing GB transmission competition regime, the following sections of this Practice Note may help: The existing position The CATO mechanism The SPV model The Competition Proxy model The Hinkley-Seabank project Introduction The Great Britain (GB) onshore electricity transmission network has, since privatisation, been owned, operated and upgraded by three licensed transmission system owners (TOs). These are three privately held companies: National Grid Electricity Transmission plc (NGET) for assets in England and Wales; SP Transmission PLC (SPT) for lines in southern Scotland; and Scottish Hydro Electric Transmission plc (SHET) for assets in northern Scotland and the Scottish islands....