UK Regulator Proposes Spinoff of National Grid ESO
January 25 2021 - 4:25AM
Dow Jones News
By Jaime Llinares Taboada
U.K. energy regulator Ofgem said Monday that it has recommended
creating an independent electricity system operator fully separate
from National Grid PLC.
The watchdog said the separation would help "avoid any perceived
or real potential conflict of interest" as the U.K. heads towards
the transition to a net-zero energy system.
The system operator--which is responsible for managing the power
transmission system and supporting the planning and coordination of
networks--became a separate entity within National Grid in 2019.
Ofgem is now recommending fully separating National Grid ESO from
its parent, as the scale of the net zero challenge could require
additional responsibilities and greater independence.
In addition, Ofgem estimates the spin-off could save British
consumers 400 million pounds-4.8 billion pounds ($547.4
million-$6.57 billion) in 2022-2050. "Full separation would help
ensure future decisions on how to manage the energy system are
taken in the interests of consumers, helping to keep costs as low
as possible," the regulator said.
Ofgem also said there is a good case for separating gas
system-operation functions from National Grid, although this
requires further consideration.
National Grid reported an adjusted operating profit of GBP146
million from its power system operator for the year ended March 31,
which compares with a group-wide operating profit of GBP3.45
billion.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
January 25, 2021 04:10 ET (09:10 GMT)
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