New independent public body has been tasked with overseeing Britain's shift to a clean, cheaper and more resilient energy system
Britain's National Energy System Operator (NESO) will officially launch today, taking up the task of overseeing the shift to more secure, affordable, and fully decarbonised energy system for homes and businesses in what it has been hailed as a "pivotal moment" for the nation's net zero transition.
The creation of NESO has seen the former National Grid Electricity System Operator (ESO) nationalised and handed additional responsibilities in several other key areas, including oversight of the national gas heating grid, as the government looks to bring the system operator roles together in one public body.
The move, which was first announced by the UK government and Ofgem in 2022, is aimed at ensuring a "holistic, whole systems approach" to transforming Britain's energy system on the pathway to a clean power grid by 2030 and a net zero emissions economy by 2050. The new government finalised the move last month, after agreeing a £630m deal with National Grid.
The government said the current system "though effective in many ways, requires a more integrated and coordinated strategy to meet the unprecedented challenges of climate change, ensuring secure energy supply, and keeping costs manageable for consumers".
Fintan Slye, chief executive at NESO, said the agency would have broad strategic oversight of both the electricity and gas systems, and will be given a remit to ensure energy infrastructure is secure, resilient, flexible and future-proof on the journey to net zero.
"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," he said.
"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."
The launch comes as energy bills for homes and businesses rise from today, after Ofgem confirmed a 10 per cent increase in the price cap.
Against that backdrop, one of NESO's first tasks is to deliver guidance to the government in the coming months on potential routes to achieving Labour's ambitious aim for a clean power system by 2030, which the new entity said would require "swift and decisive action" if it is to be achieved.
That guidance, and the government's response to it, is eagerly anticipated by businesses, who have long been demanding a clear, detailed plan for decarbonising the electricity system in order to help unlock much needed private sector investment in the net zero transition.
At the same time, NESO will support the government's imminent decisions on planning and grid reforms to help accelerate the delivery of new renewables and flexible grid infrastructure, as well as wider electricity market reforms that could see a switch to a locational pricing regime.
Paul Golby, NESO's inaugural chair, stressed that "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," he added.
Building on the existing capabilities of National Grid ESO - which was a commercial, private sector operation - NESO will have a wider range of responsibilities, including managing the power system in real time, planning future gas and electricity development, and developing market arrangements across the wider energy system.
It is also expected to provide independent advice to the government and regulatory Ofgem on energy policy, while working with energy firms across the sector to ensure a smooth transition to a net zero and more affordable and resilient energy system.
Energy Minister Michael Shanks said the official launch of NESO marked a "milestone" in the government's mission to make Britain a "clean energy superpower".
"This new independent body will help to set a path to decarbonising our networks, giving the industry confidence to invest in a clean energy future and supporting skilled jobs across the country," he 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."
You can now sign up to attend the fifth annual Net Zero Festival, which will be hosted by BusinessGreen on October 22-23 at the Business Design Centre in London.
