National Grid to create new firm to operate system

UK energy regulator, Ofgem, confirmed Thursday National Grid should proceed with plans to set up a new, legally separate company to perform its electricity system operator function within National Grid plc.

In January, Ofgem, the government and National Grid disclosed plans for the future of the electricity system operator (ESO), while Ofgem launched a consultation for more details about ESO’s role.

The new system operator company is expected to be fully operational by April 2019, Kallanish Energy learns.

Through the reform, the new ESO will have its own license, separate staff and offices apart from other National Grid electricity subsidiaries. The new company’s board members won’t be able to sit on the National Grid Group board or other National Grid electricity company boards, Ofgem said, in a statement.

“This marks a significant milestone that enables a more secure, competitive and flexible energy system which will ultimately benefit consumers,” said National Grid CEO John Pettigrew.

The company said legal separation of the ESO within National Grid Group is considered to be the best approach to meet the needs of a changing energy market.

“Separation can deliver customer value through competition, greater flexibility and efficient markets, while establishing a level playing field for all technologies,” it added.