The Department of Energy Security and Net Zero (DESNZ) has today (13 September) issued notice that the government has acquired National Grid’s Electricity System Operator (ESO), which will be transferred to public ownership.
The new, publicly owned National Energy System Operator (NESO) will launch on 1 October and will be chaired by former E.ON CEO Dr Paul Golby. It will work alongside Great British Energy to deploy renewable energy, helping to connect new generation projects with the electricity grid.
NESO has been established through powers under the Energy Act 2023, which sets out the responsibilities of the new public body to maintain the UK’s energy supplies, protect energy consumers and plan for an efficient clean energy system that is fit for the future.
It will oversee the strategic planning and design of the UK’s electricity and gas networks, breaking down the siloes which currently exist because the two systems are managed separately. Further, it will look to renewable generation, storage and other emerging technologies like carbon capture usage and storage, mapping out the UK’s future energy networks.
Energy secretary Ed Miliband said: “Today marks a milestone for Britain’s energy system as we bring the system operator into public ownership to provide impartial, whole-system expertise on building a network that is fit for the future.”
He added that the new NESO will have “a huge role to play in delivering our mission to make Britain a clean energy superpower”.
The government’s Mission Control, headed by Chris Stark and established in July this year, has commissioned the new NESO to provide advice on how the UK will hit its goal to deliver clean power by 2030.
A letter penned by Miliband and Stark asked for “practical advice” on achieving clean power by 2030. Stating a determination to work in close partnership with the NESO, the letter asked that the NESO work with Mission Control at DESNZ on a plan based on a shared set of assumptions about what is technically required and feasible to deliver clean power by 2030.
Golby, the newly appointed chair of the NESO, stated: “NESO will support a more integrated and coordinated strategy to meet the unprecedented challenges of climate change, ensuring security of energy supply and keeping bills as low as possible.
“We will have a broad strategic oversight of both the electricity and gas systems, managing system planning, market operations, and ensuring that our energy infrastructure is secure, resilient, flexible, and future-proof.”
NESO promises lower consumer costs
The government agreed an enterprise value of £630 million to acquire the ESO from National Grid, subject to customary closing arrangements. According to DESNZ, the majority of taxpayer costs will be recouped via existing energy bill charges, which previously would have gone to National Grid.
As part of the NESO’s creation, the ownership of Elexon will transfer to a group of industry bodies.
Speaking on the news, chief executive of industry regulator Ofgem, said: “The setup of NESO is a huge step forward in ending Britain’s exposure to volatile energy markets and getting clean, renewable power to every single one of us. Its work is central to long-term energy security and to running the system day to day.”
Echoing this optimism, head of policy at the Energy Savings Trust, Stew Horne, said: “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.”
