Energy regulator argues National Grid should be stripped of responsibility for managing Britain’s power grid due to conflict of interest concerns
Ofgem has called for the creation of a new independent body to oversee the UK’s transition to a net zero electricity system, in a landmark move that would strip responsibility for balancing Britain’s grid from National Grid in order to combat long-standing conflict of interest concerns.
National Grid has managed Britain’s grid since it was privatised over 30 years ago, but the UK’s energy regulator today recommended fully separating out this responsibility from the company, arguing a new independent body would be better placed to lead the path to net zero emissions at the lowest cost to consumers.
Ofgem believes both owning the energy networks as well as holding responsibility for keeping Britain’s lights on could create a conflict of interest at National Grid, with regional networks playing an increasingly important role in balancing the grid as more wind, solar and battery storage come online.
In 2019 a legally separate function was created within National Grid – National Grid Energy System Operator (ESO) – to manage the power system in a bid to help avoid conflicts of interest. However, Ofgem is now recommending the government goes even further and considers a full separation of these responsibilities.
Both the regulator and the UK government have acknowledged that any additional responsibilities in the coming years, such as helping growing numbers of electric vehicle (EV) owners to charge up their cars