Today (1 October) marks the official launch of the National Energy System Operator (NESO).
The new organisation will be operationally independent of both the government and the energy industry and will have strategic oversight of the UK’s energy system for both gas and electricity.
One of NESO’s first responsibilities will be to advise the government on how best to hit its clean energy targets. This comes after secretary of state Ed Miliband and head of Mission Control for Clean Power Chris Stark penned a letter to the body formerly known as ESO asking it to deliver “a range of pathways” to deliver clean power by 2030. In response, the body committed to providing advice and expertise, but added that there are “critical challenges” that must be addressed to meet decarbonisation targets.
Last week, it was revealed that Ofgem had raised the maximum amount that National Grid and the former National Grid Electricity System Operator (NGESO) can claim for costs associated with transitioning to NESO following updated cost forecasts. This threshold has now been raised to £91 million, based on a new projected spend of £87 million and a £4 million contingency.
The UK government agreed on an enterprise value of £630 million to acquire the ESO from National Grid; according to the Department for Energy Security and Net Zero (DESNZ), most of the cost to the taxpayer will be reclaimed from already existing energy bill charges that would have previously been sent to National Grid. As reported by Current±, head of policy at the Energy Savings Trust, Stew Horne noted that overall, the transition to NESO is likely to save consumers money overall. Horne commented: “Bringing the energy system together in one place will help facilitate the transition to a clean energy network, enabling people to see the benefit of renewable energy on the grid through lower energy bills.”
The newly launched NESO is chaired by Paul Golby, former CEO of energy supplier E.ON, who commented: “Today is a significant day for the energy industry and for the country. The establishment of the National Energy System Operator is critical not just to the delivery of clean power by 2030 but to the delivery of net zero by 2050.”
“As we take on the new roles and responsibilities of NESO, it is critical that we do so with humility. We won’t know all the answers by ourselves, but by working together with government, the regulator, industry and wider society, we can deliver on our primary duties to run a safe, secure and affordable energy system capable of supporting net zero.”
Energy Minister Michael Shanks added: “We are on a mission to make Britain a clean energy superpower, and today marks a milestone in that journey with the launch of NESO. This new independent body will help to set a path to decarbonising our networks, giving the industry confidence to invest in a clean energy future and supporting skilled jobs across the country.
“To protect billpayers, we must reduce our reliance on insecure fossil fuel markets, and I look forward to working with NESO, alongside Ofgem, to deliver clean power by 2030.”
