National Grid tp partly nationalised in energy shake up

The National Grid will no longer be responsible for keeping the country’s electricity and gas flowing – in the biggest overhaul of the UK’s energy infrastructure since the company was privatised 30 years ago

The government has announced a division of The National Grid will be returned to public control by 2024.

National Grid Electricity System Operator (NGESO) – which is a separate legal entity from the FTSE 100 company – will be effectively nationalised and turned into a Future System Operator (FSO).

This will give ministers greater powers to oversee the system as the UK aims to secure energy independence and reach net zero carbon emissions by 2050.

The FSO will oversee the integration of technologies such as hydrogen and carbon capture and storage into existing gas and electricity systems.

It is also hoped the move will keep costs down, with household energy bills spiking to nearly £2,000 per year amid an escalating energy crisis.

The operator will be in public ownership to ensure it is independent.

Business Secretary Kwasi Kwarteng said: “Our energy system is at a transformative moment. We need fundamental change to ensure we match the scale of our net zero ambitions

National Grid chief executive John Pettigrew said: “National Grid has a critical role to play in the decarbonisation of the economy to reach net zero, whilst continuing to ensure security of supply at the lowest cost to consumers.  We have been working closely with government, industry and the regulator to create an FSO that enables long-term holistic thinking, drives progress towards net zero, and lays the foundations for the regulatory reform necessary to deliver a clean, fair and affordable energy transition. “

Alongside taking on NGESO’s duties, it will have some responsibility for managing gas supply and demand. 

As an FSO, it will also have a statutory duty to advise Ofgem and the government to help with key policy decisions, as well as helping to shape the wider energy system. 

The body will be licenced and regulated by Ofgem and paid for by consumers through price controls.