Source · Select Committees · Business and Trade Committee
Recommendation 61
61
Accepted
Paragraph: 243
Future System Operator's roles, responsibilities, and powers lack clarity.
Conclusion
The Future System Operator (FSO) is expected to provide strategic oversight of the planning and coordination of the power system, but there is a still a lack of clarity over its specific roles, responsibilities and powers, as well as how it will interact with the Government and Ofgem. It is vital that the FSO is adequately resourced and that there is sufficient accountability and scrutiny of its work.
Government Response Summary
The government outlines that the FSO will have necessary powers via the Energy Bill, with Ofgem regulating its functions, performance, and funding. It commits to creating and publishing a framework agreement to clarify roles between ministers, Ofgem, and the FSO, with the FSO aiming to be operational in 2024.
Paragraph Reference:
243
Government Response
Accepted
HM Government
Accepted
154. Subject to the passage of the Energy Bill, the FSO will have the powers needed to discharge their functions effectively. 155. The FSO will manage the electricity system in real time, bring together the planning for the electricity and gas networks into a single institution and build up capability to undertake whole system network planning. There are a number of other potential roles that the FSO could take on over time, for example in relation to local and regional energy planning, data, heat, transport, hydrogen and Carbon Capture Usage and Storage (CCUS). 156. The obligations on the FSO will be set out in licences and regulated by Ofgem, and Ofgem will ensure that other licensees have appropriate obligations themselves to manage their relationship with the FSO. 157. Ofgem will also assess the FSO’s business plans and performance and allocate funding through a price control process. This ensures that the FSO will be appropriately funded to discharge its functions efficiently. 158. The FSO will maintain the UK’s energy security and operate at the cutting edge of net zero with a long-term ambitious vision. The Energy Bill imposes a duty on the FSO to carry out its functions in a way that it considers best calculated to promote the net zero objective. 159. Progress is reliant on several factors, including timings of the including timings of the Energy Bill and delivery by key parties. The aim is for the FSO to be operational in 2024. 160. As part of the FSO’s establishment, the Government will create a framework agreement to outline the primary aspects of FSO’s relationships with government. This will include clear articulation of the roles of Ministers, Ofgem and the FSO, and will be made public. 161. The ESO already makes available public information on the Network Options Assessment and publishes a wide range of documentation on future challenges. The select committee will be able to invite the CEO and Chair of the FSO to attend their sessions.