National Grid subject of UK parliamentary report recommending independent body manage power networks
National Grid’s [LON:NG] role in managing the UK’s power network should be given to a central independent organisation and regional network operators, according to a report from UK members of parliament (MPs), The Times reported.
The UK parliament’s energy and climate change committee's report, Low Carbon Network Infrastructure, which is to be released today (17 June), argues for a National Grid break-up. The proposals would, if adopted, have a significant effect on National Grid, leaving it without a role in managing the UK's power network, the report said.
On 10 November 2015, National Grid announced that it will in 2H15-1H16 begin a sale process for a majority stake in its UK gas distribution business.
The item cited concerns in the power industry and at the energy regulator Ofgem about the extent of National Grid’s influence. Its position as operator of the UK’s electricity transmission network is leading to growing tensions with other groups and limiting innovation, to the detriment of consumers’ interests, according to the article.
The report goes on to cite conflicting interests with regards to National Grid’s profits from its financial interest in “interconnectors” -- high-voltage cable links between the UK and other countries in Europe -- while simultaneously managing the UK’s energy network.
The committee’s chairman, Angus MacNeil, said the UK should use the US model of having an independent system operator.
The newspaper disclosed in March that UK civil servants were looking at proposals to form an independent system operator, under the remit of Ofgem.
The article went on to quote a National Grid spokesperson who said the company takes conflicts “very seriously” and that National Grid has “Chinese Walls” as safeguards. The spokesperson added that there is scant evidence that any benefits to be derived from having an independent system operator would justify the possible costs to residential consumers, the possibility of disruption to the UK’s energy sector and energy security risks.
A report in The Guardian said the committee's report made no recommendation as to whether the independent system operator should be private, state-owned, or a nonprofit.
National Grid’s market capitalisation stood at GBP 36.04bn (EUR 45.65bn) at the close of trading in London on Thursday, 16 June.
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Source The Times (London), The Guardian, previously reported intelligence