A new UK Government-owned organisation tasked with strategic oversight of both the electricity and gas systems has launched today.
The National Energy System Operator (NESO) will enable a “more integrated and coordinated strategy” to to deliver electricity decarbonisation and whole system planning to meet the UK’s net zero goals.
The body was established after the UK Government agreed a £630 million deal to acquire the Electricity System Operator (ESO) from National Grid (LON: NG).
The government insists the body “will stand independent” from both Government and industry.
One of NESO’s first actions will be to deliver guidance to the Government on the delivery of a clean power system by 2030, particularly tackling constraints on connecting renewable power projects to consumers via the grid in a way that doesn’t make energy even more expensive.
Simon Virley, vice chair and head of energy and natural resources at KPMG UK, said: “With the scale of the challenge ahead as the Government looks to achieve its 2030 clean power mission and overall net zero targets, having an independent, expert body advising the Government on the best way to achieve these goals is a welcome step forward.
“With NESO now in place from today, this marks a significant moment in the UK’s ability to make sure it stays on track to meet those decarbonisation ambitions, whilst ensuring energy security and keeping bills down as low as possible.
“The long-term ambition for NESO should be for it to be a ‘Bank of England equivalent’ for energy; operationally independent, providing expert, whole systems advice on meeting the targets set by the Government.”
NESO chair Paul Golby, a former chief executive of E.ON UK, was appointed to the role in May.
He stressed the need for “humility” as it faces transforming the UK energy system.
“Today is a significant day for the energy industry and for the country, the establishment of the National Energy System Operator is critical not just to the delivery of clean power by 2030 but to the delivery of net-zero by 2050.”
“As we take on the new roles and responsibilities of NESO it is critical that we do so with humility. We won’t know all the answers by ourselves but by working together with Government, the regulator, industry and wider society we can deliver on our primary duties to run a safe, secure and affordable energy system capable of supporting net-zero.”
Fintan Slye, the body’s chief executive added: “NESO will sit at the heart of the energy industry ensuring that a holistic, whole system approach is taken in delivering decarbonisation across energy, heating, transport and beyond in order to delivery net-zero.”
“NESO will act as a catalyst, but it is through collective effort across the energy industry and society at large that we will deliver an energy system that is secure, resilient, flexible, and future-proof.”
Energy Minister Michael Shanks said: “To protect billpayers, we must reduce our reliance on insecure fossil fuel markets and I look forward to working with NESO, alongside Ofgem, to deliver clean power by 2030.”
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