Jillian Ambrose Energy correspondent 

UK government to buy electricity system operator from National Grid for £630m

New operator, Neso, will also oversee Great Britain’s gas system as part of ‘clean energy superpower’ mission
  
  

Electricity pylons.
The decision to remove the ESO from National Grid’s ownership was made when the Conservatives were in government. Photograph: Gareth Fuller/PA

The UK government has agreed to take control of the National Grid unit tasked with keeping the lights on in a £630m deal that takes effect from next month.

Great Britain’s electricity system operator (ESO) will be transferred into public ownership to create a new national energy system operator (Neso), which will also oversee the gas system.

The government hopes that by bringing together the separate units involved in planning Great Britain’s electricity and gas networks under one publicly owned company, the system operator can adopt a more strategic approach to achieving a net zero energy system by 2030.

Ed Miliband, the energy secretary, said Neso would have “a huge role to play in delivering our mission to make Britain a clean energy superpower” by providing “impartial, whole-system expertise on building a network that is fit for the future”.

He said: “We need to move Britain off expensive, insecure fossil fuel markets, and onto clean, cheap homegrown power that we control. This is how we reduce bills in the long term, strengthen our energy independence and support skilled jobs across the country.”

Neso is expected to work alongside GB Energy, a public company set up by the Labour government to invest in low-carbon energy, to help connect new generation projects with the electricity grid. It has already been tasked by Labour’s Mission Control, a new body established to oversee its green energy ambitions, to give advice on how the UK can reach its 2030 target.

The ESO director, Fintan Slye, will become the chief executive of Neso. He said the “bold step” would unify the UK’s approach to developing a future energy system that “affordable and fit for the future”.

“We are ready, and look forward to providing expert independent advice and working collaboratively across all parts of the energy sector, with government, the regulator and within our communities across Great Britain,” he said.

The decision to remove the ESO from National Grid’s ownership was made under the previous Conservative government because of concerns over a conflict of interest relating to the operator’s role providing strategic advice to government officials. The deal was expected to take place in July this year but it was delayed until 1 October because of the general election.

The FTSE 100 company will continue to own and run most of the transmission cables and electricity distribution grids across the country, and will also continue developing the high-voltage cables linking the nation’s grid to other countries.

John Pettigrew, the chief executive of National Grid, said:“We look forward to working together with Neso to continue to drive the UK’s energy transition forward at pace; accelerating the decarbonisation of the energy system for the digital, electrified economies of the future.”

 

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