The Department for Energy Security and Net Zero (DESNZ) is consulting on roles that the new Future System Operator (FSO) would have with regard to resilience and national security. It is set to require the new FSO to take direction from the secretary of state, including on commercial contracts, if the government sees a potential risk to national security. DESNZ says the FSO would take on these roles “from day one” when it enters operation, planned in 2024.
In a consultation that closes on 20 October DESNZ is asking for views on:
The Secretary of State taking powers to direct the FSO to take actions over national security that affect the energy system or the continuity of essential services. That could extend to directing the FSO not to grant commercial contracts with external parties if the Secretary of State sees it as a risk to national security.
DESNZ says the government has the best view of national security issues but limited ability to act on it within the energy system. It says national security concerns “may not necessarily be urgent, but rather arise out of a long-term risk that government is managing”. The Secretary of State wants to be able to direct the FSO at any stage, including before risks materialise. Ofgem would be responsible for enforcing non-compliance with a national security direction from the Secretary of State by the FSO.
The consultation also seeks views on FSO’s role in understanding and planning system resilience, including supporting government reviews of Critical National Infrastructure. The FSO will be responsible for carrying out these roles for the electricity sector. It will have immediate responsibility for interdependencies between electricity and gas sectors and later for whole system planning that includes electricity, gas, hydrogen and the interactions between those systems.
Potential additional roles for the FSO also include:
• Becoming the National Security Vetting Sponsoring Authority for the electricity and gas sectors.
• Proactively analyse and review real-time data and information to identify and monitor emerging situations across the electricity and gas sectors.
• Overseeing whole system emergency preparedness.
• Coordinating emergency response, including making decisions across the whole energy system.
• Becoming the allocation body for hydrogen production, following a planned to move to price competitive allocation for electrolysis projects by 2025.
See the full consultation here