New state body to secure UK’s energy and keep bills down

The government will pay National Grid £630 million to buy the business responsible for keeping Britain’s lights on as it establishes a new public entity for running the energy system.
The National Energy System Operator, or Neso, will be launched in October as an independent body that will bring oversight of the electricity and gas systems together for the first time, a move that Ed Miliband, the energy secretary, said would help to build a “network that is fit for the future”.
Long-term concerns over potential conflicts of interest had already resulted in National Grid’s Electricity System Operator, which will form the core of the new state-owned body, becoming a legally separate entity in 2019.
Neso will balance daily energy supply and demand on the grid and also will oversee strategic planning and design decisions, including mapping where best to develop new power projects to match generation with areas of high demand.
The government said that the state-owned body would support Britain’s energy security, would help to keep bills down over the long term and would boost clean energy on the grid.
Miliband said that Neso would have a “huge role” in helping to achieve the government’s target of decarbonising the energy system by 2030. “We need to move Britain off expensive, insecure fossil fuel markets and on to clean, cheap homegrown power that we control,” he said. “This is how we reduce bills in the long term, strengthen our energy independence and support skilled jobs across the country.”
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The majority of taxpayer costs associated with the acquisition would be recouped via existing charges on energy bills, which previously would have gone to National Grid, the government said.
Plans for a joint body responsible for overseeing the gas and electricity networks were set out in 2021 under the previous government, after recommendations made by Ofgem, the energy regulator, for a separation of the network operators from the owners of the transmission systems.
Jonathan Brearley, Ofgem’s chief executive, said that the creation of the combined body was a big step forward in “ending Britain’s exposure to volatile energy markets and getting clean, renewable power to every single one of us. Its work is central to long-term energy security and to running the system day to day.”
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National Grid owns and maintains much of Britain’s national power network, has bought Western Power Distribution, the largest electricity distribution network, and develops subsea power cables known as interconnectors. The use of the proceeds was not disclosed, but National Grid is planning a £60 billion upgrade of the energy system over the next five years to improve the capacity and design of the grid to cope with a substantial increase in electricity consumption.
Shares in National Grid shares were up by 3p, or 0.3 per cent, at £10.40½ in lunchtime trading.