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UK regulator to introduce BETTA

20 May 2002 – Following a UK Government decision to bring forward legislation to reform the electricity generation market in Scotland, energy regulator Ofgem announced today the next steps now needed to implement these reforms.

Secretary of State for Trade and Industry Patricia Hewitt confirmed last month that legislation would be brought forward to implement new British Electricity Trading and Transmission Arrangements (BETTA).

These reforms will implement the New Electricity Trading Arrangements (NETA) introduced in England and Wales more than a year ago across Britain to encompass the Scottish market. This means there will be, for the first time, a fully competitive British-wide market for the wholesale trading of electricity. The reforms will also help create a wider market for traditional and renewable forms of electricity.

Ofgem’s Chief Executive, Callum McCarthy, said,
“Scottish customers currently do not fully benefit from the competition that is now established in the wholesale market in England and Wales where prices are around 40 per cent lower than they were since NETA reforms were proposed in 1998. This is important as wholesale costs make up about half of all domestic customers’ bills.

“We welcome the Government’s commitment to bring forward legislation to implement these reforms. We are now highlighting the next steps to implement BETTA which will bring more competitive electricity prices, help tackle fuel poverty suffered by one in three Scottish households and improve the competitiveness of British businesses, particularly those in Scotland. They will also provide a larger market for both traditional and renewable forms of electricity generation.”

The reforms will include:

* a single operator of the British electricity transmission system
* a single set of British-wide arrangements for the real time balancing of the transmission system and for settling the cost of balancing, and
* a single set of British-wide arrangements for access to the transmission system.

The next steps identified are based on the results of a consultation on BETTA published in December.

As a first step, a seminar will be held to discuss further the division of responsibilities between the system operator and transmission system owners and provide more details on the proposals for taking forward the BETTA reforms.

This will be followed by a series of consultations over the following months on a range of topics including:

– the different functions of the system operator and transmission owner
– transmission access and charging
– system of security and quality of supply standards
– the processes needed to appoint a British-wide system operator, and
– separate price controls and incentives for both a British-wide system operator and transmission owner.

It is planned that BETTA will be implemented in 2004, if the parliamentary timetable allows for legislation to be enacted in the 2002-2003 session.