National Grid-ESO to be replaced by ‘more independent’ operator of Britain’s grid


Critics of the National Grid’s ambivalent ‘running with the fox, while hunting with the hounds’ status were vindicated today, as Beis ministers floated their intention of stripping it of its function as the GB systems operator.   

In the spring regulator Ofgem voiced its concern that the firm, quoted on the London Stock Exchange, will face increasing conflicts of interest between its advice in managing the grid outside Northern Ireland, and its ownership of power transmission businesses which stand to benefit from others’ investment plans.

The conflicts persisted, Ofgem argues, beyond April 2019, when the NG-ESO’s grid management functions were legally separated from its transmission operations.

Further separating systems operation from transmission networks could save consumers anything between £400 million and £4.8 billion by 2050 through greater competition, the regulator noted.

Ministers’ new intentions, revealed in a two-month Beis consultation launched today, are for an independent ‘Future Systems Operator’ to oversee balancing and network operations, across both the nation’s electricity and gas markets. The FSO’s status and accountability, either as a private company or on a spectrum of non-governmental public agencies, are topics up for discussion.

The FSO will need provide impartial data and unbiased judgement between commercial interests, the document stresses, as the grid changes rapidly and radically out of recognition.  

Decentralised generation, coupled with decentralised storage and trading of clean power from devices ranging from millions of interconnected EVs to grid-scale batteries, will define Britain’s radically different ‘future’ systems. A Future Systems Operator must be competent and adequately structured to meet its challenges.

Today’s consultation flags up how smart appliances and other green technologies must be accommodated in the energy system. Beis believes re-defined regulation could save customers £10bn a year by 2050, while creating up to 10,000 jobs for electricians, data scientists and engineers.

Anne-Marie Trevelyan, the energy and climate change minister, said the rules would allow households to “take control of their energy use and save money” while helping to make sure there is clean electricity available “when and where it’s needed”.

She added, “We need to ensure our energy system can cope with the demands of the future. Smart technologies will help us to tackle climate change while making sure that the lights stay on and bills stay low.”

Beis’s Future Systems Operator consultation closes on 28 September. More details here.

Other policy announcements expected before Parliament rises on Thursday are likely to include, the Smart Systems and Flexibility Plan, a consultation on reform of energy code governance, and the far-reaching Energy Digitalisation Strategy.


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