Planning key focus for Britain’s future National Energy System Operator

Britain’s forthcoming National Energy System Operator (NESO) will be charged with producing two key energy plans.

The new organisation, which will replace the current National Grid ESO, is intended to continue the delivery of the existing electricity market roles, including control centre operations, market development and transactions and system insight, planning and network development, while also taking on additional gas market planning, forecasting and market strategy roles.

In addition, the NESO is to be charged with a whole energy system role to understand and plan system security and resilience across electricity and gas and the interactions between them to overcome the hurdles towards the delivery of a net-zero energy system.

In particular, two plans are proposed – a ‘strategic spatial energy plan’ and a ‘centralised strategic network plan’.

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The strategic spatial energy plan, which was announced in the 2023 transmission acceleration action plan, is proposed to define the optimal mix and location of generation and energy infrastructure to meet the forecast demand and net-zero targets.

The outputs of this plan will clarify the network infrastructure needed to accommodate this generation siting, with further network infrastructure planning subsequently carried out via the centralised strategic network plan to provide an independent, coordinated and longer term approach to wider network planning to help meet the government’s net zero ambitions.

At first, the longer-term plan should focus on the electricity transmission network – onshore, offshore and interconnectors – as well as developments in natural gas transmission and hydrogen. Subsequently, it should evolve and expand across the whole energy system.

With the necessary licencing conditions being proposed, further details on the scope of the strategic spatial energy plan are to be set out, including how wider constraints on land and sea use will be considered throughout its development.

The licence condition for the centralised strategic network plan also contains an obligation on the NESO to develop a planning methodology, in consultation with regulator Ofgem and other interested parties.

The new NESO is intended as an expert body with high levels of engineering capability and the organisational design, incentives and accountability to be independent from both government and other commercial energy interests and to act impartially in the best interests of consumers.

Currently, consultations are underway on the proposed two licences for electricity system operation and gas system planning, with the aim for the new organisation to launch later in 2024.