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UK to launch new body to oversee its energy network
13/4/2022
News
The UK government has committed to introducing a new Future System Operator (FSO) to oversee its energy system, support new technology and improve the security of energy supply.
Legislation must be passed and timelines agreed upon before the FSO will be launched. It will look at the UK’s entire energy system, integrating its existing networks with nascent technologies including hydrogen.
The existing capabilities of the Electricity System Operator (ESO) and, to a lesser extent, National Grid Gas (NGG), will inform this new public body. Working with energy suppliers and networks, the FSO will aim to balance the UK’s electricity systems and ensure that households and businesses receive continued energy resilience and security.
It will also offer some strategic oversight of the country’s gas system by undertaking the long-term planning of gas. However, real-time operation will remain with NGG.
The announcement was made amidst spiralling global wholesale gas prices and ahead of publication of the Energy Security Strategy which sets out the UK government’s approach for ensuring clean energy independence for Britain.
Jonathan Brearley, Chief Executive of Ofgem, said: ‘A fully independent system operator will help to transform Great Britain’s energy system and cut customers’ energy bills. Critically, the FSO will ensure that we will build a smart, efficient and flexible system that will mean that Britain moves to a secure low carbon and low-cost system.’
Steve Thomas, National Secretary for trade union Prospect, commented: ‘As the government recognises, we have a breadth of skills and talent in the National Grid Electricity System Operator and the success of the new body will depend on the retention of those expert workers and making the new organisation an attractive and rewarding place for a career. Workers need certainty on exactly what the new ownership model will look like, and on their future prospects.’
In related news, National Grid is selling its stake in the ESO’s NGG Transmission businesses for £4.2bn. A consortium including Macquarie will pay £2.2bn for a 60% stake initially, before buying the National Grid’s remaining 40% between January and June 2023.
Once completed, the deal will leave about 70% of National Grid Group’s assets being in electricity, increasing from 60% now. National Grid signalled its intent to quit gas and pivot exclusively towards electricity in March 2021.
