The British government has agreed to take control of the National Grid division, responsible for keeping electricity supplied, in a £630 million deal that takes effect next month.
The Electricity System Operator (ESO) will be brought under public control and a new National Energy System Operator (NESO) will be established, which will also oversee the UK's gas system.
The government hopes that decoupling the planning of England's electricity and gas networks under a single public enterprise will allow system operators to take a more strategic approach to meeting their target of creating a net-zero energy system by 2030.
Energy Secretary Ed Miliband said NESO would play a “major role in delivering our mission to make the UK a clean energy powerhouse” by providing “impartial, system-wide expertise on building a network fit for the future”.
“The UK needs to move away from expensive and volatile fossil fuel markets and towards clean, cheap, domestically produced electricity that we control. This is how we will reduce our electricity bills in the long term, strengthen our energy independence and support skilled workers across the country,” he said.
Neso will work with GB Energy, a public enterprise set up by the Labor government to invest in low-carbon energy, to help connect new power projects to the grid. The company has already been tasked by Mission Control, a newly set up body to oversee Labor's green energy plans, to advise the government on how to meet its 2030 targets.
ESO director Fintan Sly will become chief executive of Neso, a “bold step” he said would unify efforts to develop the UK's “affordable and future-fit” energy system.
“We stand ready and look forward to working with governments, regulators and communities across the UK to provide expert independent advice and collaborate in all parts of the energy sector,” he said.
The decision to remove ESO from National Grid ownership was made under the previous Conservative government due to conflict of interest concerns related to the operator's role in providing strategic advice to government officials. The deal was due to take place in July this year but was delayed until October 1 because of the general election timing.
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FTSE 100 companies will continue to own and operate most of the country's electricity transmission cables and distribution network, and will also continue to develop the high-voltage cables that connect the country's electricity grid to other countries.
John Pettigrew, chief executive of National Grid, said: “We look forward to working with Neso to continue to fast-track the UK's energy transition and accelerate the decarbonisation of the energy system for the digitalised and electrified economy of the future.”
