OFGEM NATIONAL GRID'S SYSTEM OPERATOR ROLE (9567T)
12 January 2017 - 6:00PM
UK Regulatory
TIDMNG.
RNS Number : 9567T
OFGEM
12 January 2017
12 January 2017
GREATER SEPARATION FOR NATIONAL GRID'S SYSTEM OPERATOR ROLE
-- A new, legally separate electricity system operator is
intended to be established within National Grid
-- Greater separation will allow the new system operator to play
a more proactive role in managing a more flexible electricity
system
Ofgem and the Government have today announced plans to create
greater separation between the system operator role performed by
National Grid and the rest of the National Grid group.
A more independent system operator will help to keep household
bills down by working to ensure and enable more competition,
coordination and innovation across the system. The system operator
role includes balancing the electricity grid second by second. In
future as the electricity system becomes more flexible this role
will need to evolve. The system operator will also have to work
more closely with local electricity distribution network operators
to manage electricity flows across the grids.
To this end, Ofgem has published a consultation for a legally
separate electricity system operator to be established within
National Grid.
Dermot Nolan, chief executive of Ofgem, said: "We need a more
flexible energy system so that we can make the transition to a
lower carbon future. A more flexible system will also ensure
customers get the most out of new smart technologies.
"As the system changes, it's important that all the monopoly
networks adapt. Having a legally separate system operator will
allow it to take on a more proactive role in managing the system
and working with others, while mitigating any conflicts of
interest."
Greg Clark, the Business and Energy Secretary, said: "Separating
our system operator will give greater confidence to investors that
Great Britain offers a level playing field for companies wanting to
be part of our clean, secure and flexible energy system - keeping
costs as low as possible for our homes and businesses."
It is proposed that the more independent system operator will
have distinct employees, directors and offices from other National
Grid electricity subsidiary companies. The process for establishing
the proposed new company is set out in a joint statement between
Government, Ofgem and National Grid, also published today.
- Ends-
1. The Ofgem consultation:
https://www.ofgem.gov.uk/publications-and-updates/future-arrangements-electricity-system-operator-its-role-and-structure
proposes new governance arrangements that mitigate potential or
perceived conflicts of interest. The reforms propose that the new
company will have its own licence, separate staff and offices to
other National Grid electricity subsidiary companies. The new
company's board members will not be able to sit on the National
Grid Group board or other National Grid electricity company
boards.
2. The consultation also proposes to set clearer expectations of
the role of the system operator (SO), and to give it new roles.
3. The new arrangements will be implemented over the next two
years. We expect that the SO will start adapting how it undertakes
its existing roles immediately, taking further steps in 2018 with
the new system operator company fully operational by April
2019.
4. The joint statement by Government, Ofgem and National Grid
setting out the intention to establish the new company can be
viewed as a sub-document to the consultation.
5. About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its
priority is to make a positive difference for consumers by
promoting competition in the energy markets and regulating
networks.
For facts, figures and information about Ofgem's work, see
Energy facts and figures or visit the Ofgem Data Portal.
Follow us on Twitter @ofgem and LinkedIn
Further information for media
For further information, contact:
Chris Lock: 0207 907 7225
Media out of hours mobile: 07766 511470 (media calls only)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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