Ofgem calls for new independent body to manage energy system

25th January 2021


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Ofgem has today recommended that a new independent body be created to manage the UK's electricity system and lead the country's transition to net-zero emissions.

The regulator said that a new body – fully separated from the National Grid – would help remove any perceived or real conflicts of interest on the path to net zero.

Its responsibilities would include taking a more active role in designing and planning new grid infrastructure, and providing independent advice to the government on how best to achieve carbon neutrality within three decades.

Ofgem estimates that an independent body with new responsibilities for running the electricity system could save consumers between £0.4bn and £4.8bn between 2022 and 2050.

Chief executive, Jonathan Brearley, said: “The energy system needs to go undergo the biggest transformation in over a century to meet Britain’s ambitious climate goals.

“Ofgem is recommending the creation of an independent body to help deliver the fundamental changes in how we use energy. This would help bring forward green economic growth, accelerate our journey towards net zero and save consumers money on their energy bills.”

The recommendation comes after the government last month committed to consult on reviewing the management of the energy system.

It acknowledged that any additional responsibilities may require greater independence from the National Grid, which has managed the UK's energy since privatisation three decades ago.

Ofgem said that greater strategic planning and management through the creation of a new body would help charge millions of electric vehicles and enable a huge increase in renewable power while maintaining secure energy supplies.

Business and energy secretary, Kwasi Kwarteng, said: “We must ensure that the energy system is designed to provide the very best for consumers and allows energy companies to keep innovating as we build back greener.

“I welcome Ofgem’s contribution to the debate over the future structure of our energy system and will consider its recommendations thoroughly."

Image credit: iStock

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