03 Aug 2017
National Grid welcomes Ofgem’s decision today to create a National Grid Electricity System Operator (NGESO) company within the National Grid Group, legally separate from the Electricity Transmission Owner (ETO).
This decision follows the consultation Ofgem and BEIS published in January this year proposing to create a more separate role for the electricity System Operator.
National Grid CEO John Pettigrew said:
“This marks a significant milestone that enables a more secure, competitive and flexible energy system which will ultimately benefit consumers.
“We are pleased the Government and Ofgem have recognised our vast experience and expertise in balancing the electricity system and ensuring the market runs efficiently.”
The NGESO will be incorporated as a separate company, wholly owned by National Grid, with its own board which will appoint three sufficiently independent directors. NGESO employees will be physically separate from any other National Grid electricity subsidiary company by April 2019.
Legal separation of the electricity System Operator within the National Grid Group is considered to be the best approach to meet the needs of a changing energy market. Separation can deliver customer value through competition, greater flexibility and efficient markets, while establishing a level playing field for all technologies.
The NGESO will carry out its existing functions, as well as taking on new responsibilities, including the promotion of smart solutions, in place of traditional network investment.
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