The Energy and Climate Change Committee report is recommending a major change in the way the UK energy system is operated, transferring system operation from National Grid to an Independent System Operator (at the national level) and Distribution System Operators (at the regional level). “National Grid’s technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The Independent System Operator model has worked in the USA. It is time for it to be brought to these shores. Local energy is here, with astonishing growth in generation connected directly to regional networks. Distribution Network Operators (DNOs) remain somewhat blind to their energy flows and passive in managing them. DNOs must transition to a more active role as Distribution System Operators so that they can use smart technologies to manage ever-more complicated energy flows.” The Committee notes the importance of smart meters and a smart grid to enable this transition, but expressed concerns that the roll-out of smart meters is not progressing quickly enough to achieve the necessary mass to truly create a smart energy network.
Parliament 17th June 2016 read more »
National Grid should be broken up and stripped of its role managing the UK’s power system because of “intractable and growing” conflicts of interest, according to MPs. A report released today by MPs on the energy and climate change committee recommends the FTSE 100 company be removed from its function as the UK’s electricity system operator and the role handed to a central independent body as well as regional operators. The proposals, if adopted, would represent a significant blow to National Grid, one of Britain’s biggest companies and one of the FTSE 100’s most reliable dividend payers. It would also represent one of the biggest shifts in the structure of the British energy industry since privatisation in 1989. The report on the future of the UK energy network, Low Carbon Network Infrastructure, cites growing concern within the industry and at Ofgem, the UK energy regulator, that National Grid, the owner and operator of Britain’s high-voltage wires and gas pipeline network, has become too powerful. It says its role as system operator, under which it has huge supervisory influence as manager of the UK’s electricity system, is increasingly creating tensions with other companies, stifling innovation and may not be in the interests of consumers. About £270 of the average UK household’s £1,150 annual dual-fuel bill is spent on network charges, split evenly between gas and electricity. Critics argue that the creation of an independent system operator would pave the way for greater innovation and faster investment in renewables and other low-carbon technology. The report cites conflicts of interest around the rising profits earned by National Grid from its financial stake in high-voltage cables linking the UK with other European nations – so-called interconnectors – while at the same time administering the nation’s energy network. Angus MacNeil, chairman of the committee, said: “National Grid’s technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The independent system operator model has worked in the US. It is time for it to be brought to these shores.”
Times 17th June 2016 read more »
National Grid should be stripped of its role managing the UK energy networks due to the potential for conflicts of interest, MPs on the energy select committee have said. New independent “system operators” should be set up to manage supply and demand on Britain’s national gas and electricity networks, the committee said in a report. National Grid gets regulated income for owning and maintaining the electricity transmission network in England and the gas distribution network across the UK.
Telegraph 16th June 2016 read more »
The House of Commons energy and climate change committee is urging the government to transfer control for ensuring all methods are used to keep the lights on to a newly created independent system operator (ISO). The committee report, Low Carbon Network Infrastructure, says the system needs a shake up just days after the Energy Institute complained that continual changes in energy policy were frightening away investment. “The government should set out its intentions regarding an ISO as soon as possible, and consult on a detailed, staged plan for their implementation, so as to avoid injecting uncertainty into the energy sector,” recommends the report.
Guardian 17th June 2016 read more »
FT 17th June 2016 read more »