The National Grid Electricity System Operator will be effectively nationalised and turned into a Future System Operator (FSO).
The job of keeping the UK’s electricity and gas flowing will be returned to public control by 2024 under government plans for the effective nationalisation of a division of National Grid.
A new public body, the Future System Operator, will have responsibility for planning and managing energy distribution, with a focus on the challenges posed by decarbonisation.
The government said the plan, announced on the eve of the publication of its long-awaited energy strategy, would “drive progress towards net zero while maintaining energy security and minimising costs for consumers”.
The FSO will have responsibility for planning and managing energy distribution, with a focus on the challenges posed by decarbonisation.
This will give ministers greater powers to oversee the system as the UK aims to secure energy independence following Russia’s invasion of Ukraine.
The FSO will also oversee the integration of technologies such as hydrogen and carbon capture and storage into existing gas and electricity systems.
It is hoped the move could keep costs down, with household energy bills spiking to nearly £2,000 per year.
The effective nationalisation of the ESO division comes just three years after it was formally separated from the rest of National Grid, albeit within the same corporate group.
The Department for Business, Energy and Industrial Strategy (BEIS) said the National Grid, a stock market-listed company since 1995, would be “appropriately compensated” in a transaction that will see the government take control of its Electricity System Operator (ESO), the part of the business that keeps the lights on. Some elements of managing the gas system will also transfer across.
The ESO manages supply and demand on the grid to prevent interruption of supply. The grid houses the infrastructure assets that support the system.
The National Grid’s chief executive, John Pettigrew, said National Grid “has a critical role to play in the decarbonisation of the economy to reach net zero, while continuing to ensure security of supply at the lowest cost to consumers”.
He said: “We have been working closely with government, industry and the regulator to create a Future System Operator 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.
“We will continue to work closely with all relevant parties to ensure a smooth transition, subject to parliamentary approval and conclusion of the transaction process.”
The Prospect union said it was vital that the skills and experience of people who worked in the National Grid ESO division were retained. “Workers need certainty on exactly what the new ownership model will look like, and on their future prospects.
“The government and National Grid should engage with unions to provide commitments and certainty as soon as possible.”
Labour abandon Natinalisation.
Why would anyone scrap nationalisation for a short-termed bandaid?
Labour has scrapped Energy nationalisation under Sir Keir Starmer, instead, they are proposing a short-termed bandaid, this comes in the form of a windfall tax where the majority of the money is to be given to private companies to insulate homes.
A scheme that seems to be ongoing for the last decade you can if you qualify with the Government Home energy grants here.
This is taken directly from the Labour party website where it goes into detail saying:
“Labour would bring in fully-funded measures now to reduce the expected price rise in April – saving most households around £200 or more, but targeted extra support to squeezed middle, pensioners and the lowest earners, receiving up to £600 off bills and preventing all of the increase in energy bills currently expected.
They would pay for this with a one-off windfall tax on North Sea Oil and Gas producers who have profited from price rises.
Highlighting how crucial it is to keep energy bills lower in future, Labour have said they would:
Reduce Britain’s reliance on imported gas by accelerating home-grown renewables and new nuclear
Make sure 19 million homes are warm and well-insulated, saving households an average of £400 a year on bills
Regulate the market better, with a pledge to never again let energy companies play fast and loose with the rules
Rachel Reeves MP, Labour’s Shadow Chancellor of the Exchequer, said:
“There is a global gas price crisis, but 10 years of the Conservatives’ failed energy policy, and dither and delay has created a price crisis that’s being felt by everyone.
“We want to stop bills going up.
“That’s why Labour would give families security by taking fully-funded measures to save most households around £200 or more, targeting extra support on top of that for the squeezed middle, pensioners, and lowest earners”. LINK
This is a very sad day, when we see Tories nationalising, even in part, while Labour offers the workers a bandaid from a windfall tax that will be short term and manly benefits the companies used to insulate middle-class houses, or privately rented accommodation, lets’ face it council homes have always met energy-saving standards.