UK confirms Future System Operator for holistic power, gas network planning

The UK government is to create a fully independent energy system operator, replacing National Grid Electricity System Operator and, for planning matters, National Grid Gas, the Department for Business, Energy and Industrial Strategy said April 6.

A Future System Operator, or FSO, will be launched once legislation is passed, integrating existing networks with emerging technologies such as hydrogen, the ministry said.

"The operator will take a whole-system approach to coordinating and planning the network, looking across electricity, gas and other emerging markets such as carbon capture, usage and storage, as well as offshore wind networks," BEIS said.

It would provide strategic oversight of the UK gas system by taking on longer-term planning but not real-time operation, which is to remain with National Grid Gas.

The announcement comes ahead of the government's Energy Security Strategy, due to be published on April 7.

This is expected to include upgraded targets for nuclear generation, renewables and hydrogen, as well as initiatives to boost domestic hydrocarbon production.

"Russia's appalling aggression in Ukraine amid escalating global gas prices has shown the vital importance of strategic change to the UK energy system," Energy Minister Greg Hands said.

"We need to boost our energy resilience, reduce our dependence on expensive imports and slash emissions. The FSO will do just that," he said.

Fintan Slye, executive director of National Grid Electricity System Operator, said the ESO would work "with all parties involved in the coming weeks and months to enable a smooth and successful transition."

The FSO will have a duty to provide independent advice and technical input to the government and to energy regulator Ofgem.

The government has also given Ofgem a new strategic function overseeing energy companies' governance codes.

This decision is to ensure technical and commercial rules, which guide energy providers keep pace with the UK's net zero goal, BEIS said.

"This decision is expected to result in a long-term net benefit for industry and consumers, with no adverse material impact on consumer energy bills," it said.