New publicly owned National Energy System Operator to pave the way to a clean energy future
National Energy System Operator will support the UK’s energy security, help to keep bills down in the long term, and accelerate the government’s clean power mission.
- Electricity and gas network planning to be brought under one roof, as the new independent National Energy System Operator launches to achieve the clean energy transition
- Set to launch on Tuesday 1 October
- The publicly owned body will support the UK’s energy security, help to keep bills down in the long term and accelerate the government’s clean power mission
Britain’s energy system will be planned by a new publicly owned organisation as part of a new more strategic approach, which will help to deliver clean power by 2030.
The new National Energy System Operator (NESO) will help connect new generation projects with the electricity grid, working alongside Great British Energy to deploy renewable energy, so bill payers can reap the benefits of clean, secure, homegrown power.
It comes as the government today reached an agreement with National Grid to acquire the Electricity System Operator, which will be transferred to public ownership.
Set to start work on 1 October, NESO will be chaired by former E.ON CEO Dr Paul Golby, with Fintan Slye as the Chief Executive Officer.
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.
The new National Energy System Operator has a huge role to play in delivering our mission to make Britain a clean energy superpower.
We need to move Britain off expensive, insecure fossil fuel markets, and onto clean, cheap homegrown power that we control. This is how we reduce bills in the long term, strengthen our energy independence and support skilled jobs across the country.
This is another step forward by a government in a hurry to deliver for the British people.
Currently, there is no single body responsible for overseeing the strategic planning and design of the country’s electricity and gas networks.
NESO will fill this gap – breaking down the siloes which currently exist between the planning of electricity and gas systems, with independent oversight for the design of all Great Britain’s energy networks.
The move will enable investors to build out new energy infrastructure with confidence in how their project will fit into the country’s wider clean energy plan.
The new independent body will support the government’s rapid action to accelerate to net zero.
The government’s Mission Control – headed up by Chris Stark – has already given NESO one of its first tasks – commissioning it to provide advice on how the UK will hit its goal to deliver clean power by 2030.
It comes on top of launching Great British Energy, lifting England’s onshore wind ban, approving four major solar farms and launching the Clean Energy Mission Control Centre.
John Pettigrew, Chief Executive of National Grid, said:
We look forward to working together with NESO to continue to drive the UK’s energy transition forward at pace; accelerating the decarbonisation of the energy system for the digital, electrified economies of the future.
Paul Golby, Chair of the National Energy System Operator said:
This is a pivotal moment as we head closer to the launch of the National Energy System Operator on 1 October. 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.
NESO brings together critical roles and responsibilities under one roof, creating an environment that is essential for success. 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.
The National Energy System Operator has been established through powers under the Energy Act 2023. This 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.
As part of this, NESO will take a cross-sector approach to planning the country’s energy system in the best interests of the British public - looking across electricity, gas and hydrogen, as well as renewable generation, storage and other emerging technologies like carbon capture usage and storage. The independent organisation will map out the country’s future energy networks – helping both the government and Ofgem make informed decisions when considering new infrastructure, speeding up grid connections and progressing the UK’s net zero goals.
Fintan Slye, Chief Executive of the National Energy System Operator, said:
Today is a crucial step in our journey to become the National Energy System Operator and we’re delighted that the Energy Secretary has confirmed 1 October will be the launch day of this new independent organisation.
We are excited to take this bold step forward to help unify and optimise our national approach to energy and to deliver the clean, secure, decarbonised energy system that is affordable and fit for the future.
We are ready, and look forward to providing expert independent advice and working collaboratively across all parts of the energy sector, with government, the regulator and within our communities across Great Britain.
Jonathan Brearley, Chief Executive of 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.
We look forward to working with NESO to ensure Britain gets the clean power system it needs at the lowest possible cost to consumers and taxpayers.
Further information
Key publications to be provided by NESO over the next few years include:
- Strategic Spatial Energy Plan: The spatial plan will set out a coordinated approach for Great Britain’s onshore and offshore energy infrastructure to help cut grid connection waiting times and provide cost-effective energy generation. This advice will also cover how to spread new energy projects across the country in a way that will reduce the costs in transporting power to homes and businesses, which could in turn bring down bills for consumers.
- Future Energy Pathways report: The annual report will advise on how future energy demand and supply could be met by making changes to infrastructure, technology, innovation and consumer behaviour in line with net zero targets. It will build on the Future Energy Scenarios report that has been produced annually by the Electricity System Operator since 2011.
- Centralised Strategic Network Plan: The plan will provide a network blueprint for the country, mapping the demand and optimal locations for offshore and onshore transmission infrastructure to support a decarbonised energy grid. NESO will also work at a local level, with plans to deploy up to 13 regional energy system plans across the country over the next few years. These roles will work with local authorities and energy distribution networks to improve understanding of regional infrastructure needs, paving the way for new skilled jobs across the country.
Notes to editors
Further details on the government’s decision to create NESO are contained at the following link – Decision Notice and NESO Licences
There have been 3 consultations on the creation of NESO:
- Proposals for a Future System Operator;
- Future System Operator: second policy consultation and project update;
- National Energy System Operator licences and other impacted licences - statutory consultation
The enterprise value of £630m that the government has agreed with National Grid to acquire the Electricity System Operator will be subject to customary closing adjustments. The majority of taxpayer costs will be recouped via existing charges on energy bills, which previously would have gone to National Grid.
As part of the creation of NESO, the ownership of Elexon will also transfer to a group of industry bodies. Elexon is a not-for-profit company that balances financial settlements for the electricity network, by resolving the price difference in how much electricity generators and suppliers say they will produce or consume versus the actual volumes. The transfer of ownership of Elexon was consulted on between 24 January and 21 February 2024. The government’s response to the consultation, including details of the industry bodies that will oversee Elexon is available here: Future ownership of Elexon: licence and code changes - government response.
The head of Mission Control, Chris Stark, commissioned the Electricity System Operator to provide advice on the work needed to reach the UK’s clean power by 2030 target, via a letter on 23 August. This advice will be provided by the new National Energy System Operator later this year.