Government launches Future System Operator to oversee development of UK's energy network

Wed 06 April 2022 View all news

The Government has announced the creation of a new public body - the Future System Operator - which is intended to strengthen the resilience of Great Britain’s energy system.

The Future System Operator (FSO) will be launched once legislation is passed and timelines have been discussed with key parties. It will look at Great Britain’s energy system as a whole, integrating existing networks with emerging technologies such as hydrogen.

The decision was announced with the publication of a joint document from Government and Ofgem which provided the full response to a consultation on the creation of an FSO which began in July last year.

The FSO will be founded on the existing capabilities of the Electricity System Operator (ESO), and, where appropriate, National Grid Gas (NGG). It will work with energy suppliers and networks to balance the UK’s electricity systems and ensure continued energy resilience and security of supply for households and businesses. It will also provide strategic oversight of the UK gas system by taking on longer-term planning in respect of gas (but not real-time operation, which will remain with NGG).

The news came ahead of of the Government's announcement of an Energy Security Strategy which set out the approach to the UK's energy independence in the wake of Russia's invasion of Ukraine.

Energy Minister Greg Hands MP said: "Russia’s appalling aggression in Ukraine amid escalating global gas prices has shown the vital importance of strategic change to the UK energy system. We need to boost our energy resilience, reduce our dependence on expensive imports and slash emissions. The FSO will do just that."

Jonathan Brearley, chief executive of Ofgem, said: "A fully independent system operator will help to transform Great Britain’s energy system and cut customers’ energy bills. Critically, the FSO will ensure that we will build a smart, efficient and flexible system that will mean that Britain moves to a secure low carbon and low cost system."

Fintan Slye, Executive Director, Electricity System Operator, said: "We warmly welcome today’s announcement that the ESO will be at the heart of the system operator of the future. Building on our track record and skills as a world leading system operator, together with industry and government and regulators we will help deliver an affordable, reliable and clean transition for all."

John Pettigrew, CEO, National Grid said: "National Grid has a critical role to play in the decarbonisation of the economy to reach net zero, whilst continuing to ensure security of supply at the lowest cost to consumers. We have been working closely with government, industry and the regulator to create a Future System Operator that enables long-term holistic thinking, drives progress towards net zero, and lays the foundations for the regulatory reform necessary to deliver a clean, fair and affordable energy transition."

The operator will take a whole-system approach to coordinating and planning the network, looking across electricity, gas and other emerging markets such as carbon capture, usage and storage, as well as offshore wind networks.

The FSO will also have a duty to provide independent advice and technical input to the Government and industry regulator, Ofgem, to inform key strategic policy decisions.

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