The UK government is planning to separate National Grid’s electricity system operator role from the rest of the group by April 2019. National Grid is the electricity transmission system network owner in England and Wales and also the operator of Great Britain’s transmission network, managing the UK’s electricity balance, which could present a conflict of interest. Under the latest Ofgem consultation released last week, the two main businesses within National Grid will be separated rather than the company broken up, while a more independent system operator will be established within the company in order to boost competition, coordination and innovation across the system, which should keep energy bills down.
This separation will give greater confidence to investors that Great Britain offers a level playing field while a more flexible system will also ensure customers get the most out of new smart technologies. The system operator will work more closely with local electricity distribution network operators to manage electricity flows. National Grid's main activity of building and operating power transmission lines, gas pipelines and inter-connectors will not be affected. However according to some critics this dual role could mean it has an incentive to buy too much electricity and not support efforts to cut power use. Britain's electricity generation has come under increasing scrutiny as a plan to close coal-fired power stations by 2025 and a lack of appetite for investment in new natural gas plants needed to replace them has created concerns about power shortages.