The UK government has committed to creating a new public body to improve the energy system’s resilience.
The Future System Operator (FSO), which will be established once legislation has been passed and timelines have been discussed with key stakeholders, will examine the entire British energy system, integrating existing networks with emerging technologies such as hydrogen.
The FSO will be a new public body based on the Electricity System Operator’s (ESO) and, where applicable, National Grid Gas’ existing capabilities (NGG). It will work with energy suppliers and networks to balance the UK’s electricity systems and ensure that households and businesses have continued energy resilience and security of supply. It will also take on longer-term gas planning, providing strategic oversight of the UK gas system (but not real-time operation, which will remain with NGG).
Consumers are facing higher costs as a result of high global wholesale gas prices and renewed pressure on energy networks as a result of Russia’s illegal invasion of Ukraine. There is an urgent need to safeguard and boost domestically produced energy.
The announcement comes ahead of the release of the Energy Security Strategy, which will outline a strategy for ensuring Britain’s greater clean energy independence later this week. Government, Ofgem, National Grid, and the ESO have issued a joint statement, which outlines their shared vision for the FSO and their commitment to working together to bring it to fruition.
The move is intended to increase energy providers’ and billpayers’ resilience. This will increase energy security while also ensuring that the clean energy generated by the UK’s burgeoning renewables sector reaches the homes and businesses that require it across the country.
The FSO will play a key role in shaping the energy system and facilitating competition, as well as overseeing new projects and integrating them with existing energy supplies, as a trusted and expert body at the heart of the gas and electricity systems.
Following extensive consultation with the energy industry, it was agreed that the United Kingdom needed a new public body with operational independence from the government to oversee developments across the country’s energy networks.
The operator will coordinate and plan the network as a whole, considering electricity, gas, and other emerging markets like carbon capture, usage, and storage, as well as offshore wind networks.
The FSO will also be responsible for providing independent technical advice and input to the government and industry regulator, Ofgem, in order to inform key strategic policy decisions.
The responses to the consultation, which were published today, also give Ofgem a new strategic function to oversee the governance codes of energy companies. By ensuring that the detailed technical and commercial rules that guide energy providers keep pace with our net zero ambitions and deliver for UK consumers, this decision is expected to have a long-term net benefit for industry and consumers.
