Fully separating National Grid’s electricity system operator (ESO) functions from the transmission owner has thrown into relief the different approach taken over gas, and the limits to information flow between the two parts of the energy system at times of crisis like the ‘beast from the east’.
As programme director, Charlotte Ramsay is developing the future role of the ESO at National Grid. In an interview with New Power said that in a new energy system where fast response is the order of the day and interactions between gas an electricity systems are much faster, the current situation, where little information can flow between the two, is no longer fit for purpose. Over the cold snap, she notes, both systems were under stress, but “the two control rooms cannot talk to one another in that emergency situation”.
She told New Power, “You can convene a group of lawyers and make sure that they agree that nobody is going to go to prison, as a result of making sure that the lights stay on and the gas stays flowing – but really you shouldn’t have to do that. That feels like the legislation underpinning things is maybe not fit for purpose any more.”
Although National Grid carries out System Operator functions in both gas and electricity, it cannot share information between the two. “The decision to keep electricity and gas separate is entirely down to the Utilities Act and not being able to share third-party information between different licensees. It means you can’t run the control rooms together and you can’t share information,” says Ramsay.
Now the government has decided that the ESO should be run by a separate company with its own board, distancing it further from National Grid’s function as owner of the England and Wales transmission network. But similar structural changes have not been required on the gas side.
“Back in the day when there were a small number of large transmission-connected parties and less interactivity between gas and electricity, it didn’t matter – and it probably did preserve competition. But now it’s a different world. The decision to separate the ESO puts pressure on the gas and electricity interaction, which is already limited,” says Ramsay.
She thinks other industry members probably have the same gut instinct as her: “that the world across the energy sector is going to get more integrated… it would seem to make sense to think about ways to bring the ESO and Gas System Operator together”.
She adds: “The driver to separate the ESO and the transmission owner wasn’t to separate it from gas per se, it was driven firstly by Ofgem wanting to promote competition in onshore transmission, and secondly by – probably now the more dominant force – trying to pull us away from transmission networks generally.
“The fact that the gas SO was being left in the other structure was a bit of an afterthought, I think. Neither BEIS nor Ofgem has a narrative around why it is okay to have this asymmetric business model.”
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