Ofgem has confirmed that National Grid should proceed with plans to separate its electricity system operator role from the rest of the group.
The electricity system operator (ESO) “needs to adapt to keep pace with a system that is going through a process of change”, Ofgem said.
The new ESO is expected to be fully operational by April 2019, it added.
National Grid welcomed Ofgem’s decision.
It said the new entity will be a separate company, wholly-owned by National Grid, with its own board that will appoint three independent directors.
The ESO will carry out its existing functions, as well as taking on “new responsibilities, including the promotion of smart solutions, in place of traditional network investment”, National Grid said.
National Grid chief executive John Pettigrew said: “This marks a significant milestone that enables a more secure, competitive and flexible energy system which will ultimately benefit consumers.
“We are pleased the government and Ofgem have recognised our vast experience and expertise in balancing the electricity system and ensuring the market runs efficiently.”
Image: National Grid
Thumbs up for National Grid spin-off
Separate entity to be set up to perform electricity system operator role
By EBS