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Energy insightsNew independent Future System Operator set to replace National Grid
Energy market

New independent Future System Operator set to replace National Grid

20 July 2021 | 5 minutes

Ofgem is seeking views on proposals for a new expert and impartial Future Systems Operator (FSO) for gas and electricity for the UK.

New independent Future System Operator set to replace National Grid

According to the consultation, the new body will take on a number of key roles in electricity and gas to facilitate net-zero whilst maintaining a resilient and affordable system. The body will have to be fully independent of other commercial energy interests and day-to-day operational control of government. There are two proposed organisational models: a standalone, privately-owned model and a highly independent corporate body model classified within the public sector. 

The National Grid’s remit is expected to be significantly impacted as the FSO’s proposed role overlaps some of its existing responsibilities.

The consultation proposes that the move from legally separate entities for electricity and gas system operators to the FSO should enable the organisation to better fulfil its responsibilities across both systems in an integrated manner. It also states that key strategic decisions would also be better informed by having oversight and control of the entire network.

BEIS also asserts that, in addition to being operationally and technically adept, the new independent FSO will need to be financially resilient and fully accountable to consumers and the general public.

National Grid’s reaction to the Future System Operator consultation announcement

In a press statement, National Grid announced: “We...welcome the consultation and will continue to work closely with BEIS and Ofgem on the role of a Future System Operator, the most appropriate ownership model and any future related sale.”

Organisations directly impacted by the proposed change include National Grid plc, National Grid Electricity System Operator, National Grid Gas and Elexon.

Find out more

Click here to access the Future System Operator consultation proposal in more detail. The consultation closed on 28 September 2021.

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