The UK national grid regulator Ofgem (Office of Gas and Electricity Markets) announced it will set up a new legal entity in order to separate the National Grid's electricity system operator (ESO) function from its remaining businesses. The newly created entity is scheduled to be fully functional by April 2019.
The idea of a separation of the ESO role within National Grid was already announced by the Ofgem in January 2017 and a consultation was held in March. In June 2016, members of the British parliament pointed out that there might be a conflict of interest and called for National Grid to be stripped of its ESO role.
The creation of an independent ESO is expected to enable more competition and flexibility as well as prepare the introduction of smart metering technologies. Under the current proposals, the new ESO could carry out its existing functions as well as taking on new key responsibilities such as the promotion of smart solutions.
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