Boris Johnson prepares Britain’s creaking electricity network for the net zero age

It prompted Kwasi Kwarteng to wonder aloud whether the Grid should be stripped of its role running the electricity network. The Business Secretary has now given a clear answer.

The Government on Wednesday revealed plans to set up a publicly-owned body that will run the system instead of the private sector.

It means the National Grid, which currently owns and operates the electricity network, will be stripped of this responsibility and part of its business effectively nationalised.

This division, known as National Grid ESO (electricity system operator), and 1,000 staff will be folded into a new body, responsible for the day-to-day management and long-term planning of the electricity grid.

On top of this, the new body – known as the Future System Operator (FSO) – will have responsibility for the future planning of the gas system.

National Grid will retain ownership of the infrastructure, such as cables and wires.

Experts say it amounts to one of the biggest shake ups of the energy market in a generation, with ministers arguing the FSO will speed up the UK’s shift towards “net zero” carbon emissions and ensure upgrades are properly coordinated.

However, some have warned it risks being a “retrograde step” that hands too much control to the state, which is taking an ever-bigger role in the energy sector.

But Greg Hands, the energy minister, said the need for a shake-up has been demonstrated by the energy crisis that has followed Russia’s “appalling” invasion of Ukraine.

“We need to boost our energy resilience, reduce our dependence on expensive imports and slash emissions,” he said. “The FSO will do just that.”

It comes after John Pettigrew, the boss of National Grid, warned in the wake of the 2019 outage that such a shake-up from the Government risked causing “a massive amount of disruption”.

Industry figures are quick to point out that while the nationalisation may look like a reaction to that incident, it has been a long time coming and mirrors similar arrangements already in place in the US and Australia.

National Grid had already been told by regulator Ofgem to legally separate its ESO division (the electricity system) in 2017, putting a firewall between the two businesses, with a full separation seen as a possible future option.

At the heart of the issue is the shift away from fossil fuels, which will put more pressure than ever before on Britain’s electricity network.

As millions of people switch to electric cars, plugging them into the grid to charge, or replacing gas-fired boilers at home with electric heat pumps, demand is set to rocket.

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