The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)

I am pleased to announce the launch of the consultations on the future system operator (FSO) and the energy codes governance reform. This is a key step that will contribute towards helping us achieve the Government’s net zero targets and our commitment in the Energy White Paper,

Net zero is an unprecedented challenge for our economy and society—and the energy system at its heart. It has created the need for new technical roles and responsibilities in the electricity and gas systems to drive decarbonisation while minimising costs and maintaining resilience. We will require an organisation with the mandate, whole-system perspective, and engineering capability to fulfil the new and enhanced roles effectively, and the organisational design, incentives, and accountability to fulfil them impartially in the best interests of consumers.

The future system operator (FSO) consultation sets out the case for an expert, impartial, cross-vector FSO to ensure the energy system drives progress towards net zero. The system operators are in a unique position at the heart of their respective systems, both to keep each system operating in real time day to day and to be forward-looking. To help us achieve net zero, we propose bringing the electricity system operator (ESO) and the forward-looking elements of the gas system operator (GSO) together in a new entity, which will enable the systems to be transformed. The consultation also sets out the potential roles that could fall to the new organisation and presents two potential organisational templates which might be adopted. Finally, it sets out considerations on implementation.

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