So there is to be a new system operator for the Grid to separate from the transmission operator but is it possible for a company to be fully independent if it is still under the control of the company it originally formed part of? OFGEM and National Grid seem to think so. Crucially it is also not separate from UK government but there is provision for a fully independent operator in the future.
However, the intention to separate out the duties of the system operator and the transmission operator is laudable . As the way we generate and distribute energy continues to develop and become smarter it is important that the system operator can be adaptable and unbiased. I certainly hope that the intention set out in the joint statement for the new system operator to work closely with industry to develop solutions will allow for increased transparency and support for innovation.
The OFGEM consultation is open until 10 March 2017 and the separation process will not start until 2018. It will therefore be some time before we see any significant changes but I will be intrigued to see the consultation responses later this year.
A new company is to be set up to take on the system operator (SO) duties of National Grid, separating it from the transmission operator (TO) in an effort to address perceived conflicts of interest and prepare for future changes in the UK’s energy system. However, the new SO will be formed within the National Grid group with the government and regulator Ofgem claiming the plans will result in a ‘more independent’ SO despite remaining under the control of the TO. In a joint statement released today by Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS), the new SO is intended to address concerns over conflicts of interest within the National Grid in its current form.