Detail of outcome
The government / Ofgems response to this consultation sets out a summary of responses, and our key decisions, including the commitment to proceed with the creation of an expert, impartial Future System Operator (FSO).
The new Operator will:
- have a duty to facilitate net zero while maintaining security of supply, and an efficient, coordinated and economical system
- take on all the main existing Electricity System Operator (ESO) roles and the longer-term elements of the Gas System Operator (GSO), enabling more coordinated, strategic and whole systems planning
- be a public corporation, inside the public sector, but with operational independence from government
- be funded by consumers through price control arrangements regulated by Ofgem, but with the operational freedom to manage and organise itself to effectively deliver its roles and objectives
- have a duty to provide advice on request to government and Ofgem to inform key policy decisions
- take an increasingly significant role in shaping the energy system, including driving competition across the energy sector
The response also sets out our implementation approach to ensure a smooth transition to the new arrangements, and next steps.
Detail of feedback received
We received 75 responses to the consultation from a range of organisations and individuals:
- primarily from the energy industry (transmission and distribution network companies, generators, suppliers, NG plc, NGESO, Elexon, Xoserve Ltd)
- trade organisations
- representative bodies
- public bodies
- private individuals and other interested parties
During the consultation period we also held a webinar and Q&A session with approximately 100 key stakeholders and interested parties.
BEIS and Ofgem are jointly consulting on proposals for an expert, impartial Future System Operator (FSO) with responsibilities across both the electricity and gas systems, to drive progress towards net zero while maintaining energy security and minimising costs for consumers.
Our proposal is for all the current National Grid Electricity System Operator (ESO) roles and functions to be carried out by the FSO, and that the FSO should undertake strategic network planning, long-term forecasting, and market strategy functions in gas. We also consider:
- the new roles and functions an independent FSO could potentially fulfil in gas and electricity, including in network planning and independent advice
- the options for organisational models where we explore a standalone privately owned model independent of energy sector interests and a highly independent corporate body model classified within the public sector, but with operational independence from government
- implementation where we have proposed a phased implementation of the