UK Markets close in 7 hrs 42 mins

Britain to launch public system operator for future energy mix

·2-min read
FILE PHOTO: Wind turbines are seen in Finedon

LONDON (Reuters) - Britain will launch a publicly-owned system operator to take over some of the responsibilities of the National Grid and help the country meet its net zero emissions climate target, the government said on Wednesday.

Britain is striving to reach net zero emissions by 2050, a goal that will require a huge increase in renewable electricity, much greater use of electric vehicles and a change in the way Britons heat their homes. Most currently rely on natural gas.

The government is also set to launch this week an energy secutrity strategy to outline ways to increase domestic energy supplies following Russia's invasion of Ukraine and to try to contain energy costs.

To achieve the low carbon goals, the government said it would launch a Future System Operator (FSO) to oversee the integration of technologies such as hydrogen and carbon capture and storage into existing gas and electricity systems.

"A fully independent system operator will help to transform Great Britain’s energy system and cut customers’ energy bills," Jonathan Brearley, chief executive of Britain's energy regulator Ofgem said in a statement.

The country's electricity systems are overseen by National Grid's Electricity System Operator (ESO), a separate legal entity within National Grid.

The new FSO will be in public ownership to ensure it is independent, Business and Energy Secretary Kwasi Kwarteng said in a separate statement, adding the change would affect the electricity and gas system operators owned by National Grid.

"The FSO would be founded on some of the existing roles and capabilities within these organisations and will involve a transfer of ownership," he said.

National Grid said it welcomed the announcement.

"The (National Grid) ESO will continue working closely with all parties involved in the coming weeks and months to enable a smooth and successful transition," Fintan Slye, ESO Executive Director said.

Shares in National Grid were down around 0.7% early on Wednesday, slightly underperforming the wider index.

(Reporting By Susanna Twidale; editing by Barbara Lewis)