Ofgem is to explore whether the current GB system operation is capable of delivering the UK’s net zero emissions target at lowest cost to consumers through a new review.
On 13 February, it said explained that developments such as the Electricity System Operator (ESO) becoming a legally separate function within National Grid and the legislation of the 2050 net zero target, along with the 9 August blackout, had led it to accelerate its review of the ESO governance framework. Furthermore, it is to broaden the scope of the review to cover a full assessment of both gas and electricity system operation.
It will examine both the current and future challenges facing GB system operation, along with whether or not the right governance framework is in place to deliver net zero at lowest cost. The review will set out the roles, functions and capabilities system operators will need to perform to respond to the challenges of the net zero target at least cost to consumers, and assess the effectiveness of current arrangements for system operation, including functions, ownership and governance, and assess the case for change.
Its scope also includes identifying, if appropriate, a range of alternative options to current arrangements; an assessment of the suitability of options identified and, if appropriate, routes for implementation; and exploring the potential risks and benefits of key options and what, if any, incremental steps would be required if they are to be implemented.
Ofgem said that it expects to publish its findings in late spring 2020.