The House of Commons Energy and Climate Change Committee has called for National Grid to be broken up and replaced by separate system operators working at a national and regional level respectively.
The Independent System Operator (ISO) system would see a single operator controlling energy flow at a national level, and then separate regional system operators would do the work locally.
The committee’s chair, Angus Brendan MacNeil, said: “National Grid’s technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The Independent System Operator model has worked in the USA. It is time for it to be brought to these shores.”
The proposals come as part of the committee’s Low Carbon Network Infrastructure report, which suggests that changing energy infrastructure, including increasing amounts of generation from regional networks, indicates the need for a more diverse operational system.
“Local energy is here, with astonishing growth in generation connected directly to regional networks.” MacNeil said.
“Distribution Network Operators (DNOs) remain somewhat blind to their energy flows and passive in managing them. DNOs must transition to a more active role as Distribution System Operators so that they can use smart technologies to manage ever-more complicated energy flows.”
Part of the problem, the committee said, is that smaller generators currently face difficulties, at least logistically, in getting connected to the National Grid; something that they claim is getting in the way of progress towards a more diverse, and greener, energy portfolio.
MacNeil said: “The UK needs clean, renewable power, but it won’t be built if it is too costly or difficult for generators to connect to the electricity grid. Distribution networks have been overwhelmed at times by the challenge of integrating small-scale renewables.”
“Legislative and regulatory inertia”, MacNeil said, are holding back various innovative schemes that would otherwise improve our energy flow in various ways.
Despite National Grid’s “technical expertise”, the committee argue, its commercial interest in maintaining demand for connection to its infrastructure make it poorly placed to improve the diversity in energy supply that is being called for.
National Grid disputed the committee’s findings.
A spokesperson for the system operator said: “Our priority as a system operator will always be balancing the system minute-by-minute and getting the best value for billpayers, which is what the current system provides.
“The costs and risks of introducing further change to market structures must be proportional to any benefit. There is little evidence that an independent system operator model would provide any benefits that would justify the cost to households, potential disruption to much of the energy sector, and the risks to security of supply such uncertainty could create.”
Market analyst Jonathan Marshall, from independent thinktank Energy and Climate Intelligence Unit, backed up the committee’s findings, at least in their statement of the problem at hand, and joined them in advocating a “move to a flexible grid”.
He said: “The UK electricity grid is currently stuck in a mould that favours old fashioned, centralised power stations that do not allow new technologies to compete fairly. Without swift and efficient upgrades, the system will continue to favour ageing and increasingly unreliable power stations.”
