Ofgem unveils National Grid plans to drive greater energy flexibility

National Grid is to separate its role as electricity system operator (SO) from the rest of its group as part of efforts to increase the flexibility of the energy network.

Under joint proposals unveiled by the Department for Business, Energy & Industrial Strategy (BEIS), Ofgem and National Grid, a standalone company will be incorporated to take on the SO role.

The company will have its own staff and offices and will be separated from National Grid by April 2019.

The system operator role includes balancing the electricity grid second by second. Ofgem now wants the operator to work more closely with local electricity distribution network operators to manage electricity flows across the grids.

Keeping costs down

Greg Clark, the Business and Energy Secretary, said: “Separating our system operator will give greater confidence to investors that Great Britain offers a level playing field for companies wanting to be part of our clean, secure and flexible energy system – keeping costs as low as possible for our homes and businesses.”

Dermot Nolan, chief executive of Ofgem, said: “Having a legally separate system operator will allow it to take on a more proactive role in managing the system and working with others, while mitigating any conflicts of interest.”

National Grid CEO John Pettigrew added: “We believe National Grid is best placed to deliver the role of system operator, especially during a time when the energy landscape is changing rapidly.

“We share the same priorities towards keeping customer bills down, increasing certainty, enabling greener energy, and security of supply.”

Trade body launches joint project

Meanwhile, the Energy Networks Association (ENA) has issued a consultation response and set up a joint transmission system operator-distribution system operator (TSO-DSO) project to explore some of the challenges around roles and responsibilities.

David Smith, Chief Executive of the ENA, said, “The transformation in our energy system is well underway and network companies have already demonstrated their ability to adapt to these changes to meet the needs of customers.

“Our consultation response, and the TSO-DSO project, will explore challenging and detailed questions facing the sector and set out how we think customers can get the most benefit from of a smart, flexible energy system in the years ahead.”

> Read the joint statement and take part in the consultation