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National Grid to lose control of UK's power network in 'smart' energy plan

Technologies include pumped hydro storage, compressed air energy storage and the conversion of power to hydrogen

Hydrogen plant

National Grid PLC (LON:NG.) is to be stripped of its role as overseer of the UK‘s energy network under new plans unveiled by the government today.

A consultation document will look at the creation of a new energy system operator separate from National Grid with roles in both the electricity and gas systems, said the proposal.

New technical roles and responsibilities in electricity and gas systems are needed for the planning and developing future energy networks and increasing competition so decarbonisation can be driven at the lowest cost to consumers and industry, said the statement.

"An impartial, single Future System Operator (FSO) - that covers both gas and electricity sectors - could be well-placed to meet these challenges.

"To deliver the roles effectively, a body will be required that is independent of any perceived conflicts of interest within industry and this consultation will ensure it remains accountable to consumers."

The move was part of a new plan unveiled by the government to help future proof the country’s energy needs through the use of ‘smart initiatives.

The new Smart Systems and Flexibility Plan unveiled today will assess how electricity generated by clean renewable sources can be stored at large scale and over longer periods, so it is ready to meet the challenges of energy system decarbonisation.

Such technologies include pumped hydro storage, compressed air energy storage and the conversion of power to hydrogen so it can be used to generate electricity, said the paper.

Ofgem and the Department for Business, Energy and Industrial Strategy said the plan might save up to £10bn per year by 2050 and create up to 10,000 jobs.

Projects already in development include heat network projects in Gateshead and Milton Keynes, a scheme that charges electric cars and provides power to the grid at peak times and trials of new battery technology.

Energy Minister Lord Callanan said: “From looking at how something as simple as charging your electric car can cut your energy bill to making sure renewable energy can be stored for when it’s needed, this plan shows how we are using innovative technologies to meet our commitments on carbon emissions.”

Jonathan Brearley, chief executive of Ofgem, said: “This plan is essential to hitting the UK’s net-zero climate goal while keeping energy bills affordable for everyone. It requires a revolution in how and when we use electricity and will allow millions of electric cars, smart appliances and other new green technologies to digitally connect to the energy system.”

Shares in National Grid PLC (LON:NG.) were unchanged at 930.2p. 

 

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