The UK government has committed to delivering a new public body to ‘strengthen the resilience of Great Britain’s energy system’, it says.
The Future System Operator (FSO), to be launched once legislation is passed and timelines have been discussed with key parties, will look at the Great Britain’s energy system as a whole, integrating existing networks with emerging technologies such as hydrogen.
The FSO will be a new public body founded on the existing capabilities of the Electricity System Operator (ESO), and, where appropriate, National Grid Gas (NGG).
Government says it will work with energy suppliers and networks to balance the UK’s electricity systems and ensure continued energy resilience and security of supply for households and businesses.
It will also set out to provide ‘strategic oversight’ of the UK gas system by taking on longer-term planning in respect of gas.
The announcement comes as the UK government publishes its Energy Security Strategy which will set out its approach to ensuring greater clean energy independence for Britain.
Energy Minister, Greg Hands, said: “Russia’s appalling aggression in Ukraine amid escalating global gas prices has shown the vital importance of strategic change to the UK energy system.
“We need to boost our energy resilience, reduce our dependence on expensive imports and slash emissions. The FSO will do just that.”
We need to boost our energy resilience, reduce our dependence on expensive imports and slash emissions. The FSO will do just that.
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.
“We look forward to working with National Grid, government and the wider industry to implement this important change in the way the energy system is managed.”
John Pettigrew, CEO, National Grid: “The move aims to further build the resilience that energy providers and billpayers need. This will deliver greater energy security whilst ensuring the clean energy produced by the UK’s burgeoning renewables sector gets to the homes and businesses which need it across the country.
“As a trusted and expert body at the centre of the gas and electricity systems, the FSO will take a significant role in shaping the energy system and facilitating competition, overseeing new projects and integrating them with existing energy supplies.”
The announcement follows extensive consultation with the energy industry, where there was broad agreement that Great Britain needed a new public body with operational independence from government, to oversee developments across the UK’s energy networks.
The operator will take a whole-system approach to coordinating and planning the network, looking across electricity, gas and other emerging markets such as carbon capture, usage and storage, as well as offshore wind networks.
The FSO will also have a duty to provide independent advice and technical input to the government and industry regulator, Ofgem, to inform key strategic policy decisions.
The consultation responses, published today, also give Ofgem a new strategic function overseeing energy companies’ governance codes.
This decision is expected to result in a long-term net benefit for industry and consumers, by ensuring that the detailed technical and commercial rules which guide energy providers keep pace with our net zero ambitions and deliver for UK consumers.