The GB’s high-voltage electricity network should have an independent system operator (ISO) instead of leaving the responsibility with a ring-fenced part of National Grid, says a large majority of New Power’s Expert Forum.
The ISO model would provide more freedom to act and to direct the system, Forum members thought, and there was a “need to have a totally impartial, accountable system operator”. They raised the growing risk of conflicts of interest between National Grid’s roles.
But Forum members sounded a note of caution about the change. It should happen “as long as National Grid’s expertise as system operator [SO] is not lost”, one said, and another noted that “it needs to be closely aligned with National Grid”. Clearly, the current SO’s role could change to that of ISO. In that case, “some disposals may be needed, especially of interconnectors”.
The Expert Forum also expected to see distribution network operators (DNOs) evolve into active system operators. An ISO or DSO is likely to be considered a different type of investment, which could risk current investors moving out of the sector. “I would expect the regulator to either allow a higher rate of return, or allow it to pass on these costs,” said one Forum member. the shortest bid for the timetable, which was just two years. That is in tune with suggestions that the change should be set up before the next RIIO process begins. But most suggestions were considerably longer term and some stretched over two price control periods.
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New Power’s Expert Forum is a high-level industry group polled regularly on industry issues by New Power and its research partner Accent. See the Expert Forum’s view on Brexit here, in a poll carried out before the referendum.
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