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Like Caesar’s wife, the operator of the national power transmission system must be above suspicion – which is why stories this week that National Grid’s dual role as system owner and operator is up for debate have gained traction. The problem of a perceived conflict of interest between the two roles is not new – Ofgem has made it clear since the beginning of last year that it likes the idea of an independent system operator.
Apparently, ministers do too. Whether they are considering stripping National Grid of its system operator role because of new thinking or merely giving greater prominence to an ongoing debate is a moot point: clearly, Whitehall is looking at this issue. It has heard complaints that National Grid has the potential to manipulate its dual role by managing the system in such a way that it makes extra money from ancillary services it provides as network owner. There have been no suggestions that the company has actually done so – it’s the perception and the risk that are important here.
But are they as important as a stable and secure power supply, at a time when capacity margins are at historic lows and the system is vulnerable at an engineering level as it undergoes major changes in both supply and demand? National Grid faces a huge raft of challenges over the next two to three years, and the impact of this ongoing uncertainty on its ability to plan, its staff morale and its stability as an investment proposition are huge.
Sure, ministers could strip the company of its system operator role, but the process would be lengthy, complex and a distraction at this critical moment. It would also divide the country’s top engineering talent and knowledge base between two bodies. The National Infrastructure Commission, which issued an eminently sensible report this week, concluded that National Grid should work towards stronger Chinese walls internally rather than full separation. Such a compromise may not win any headlines, but it certainly seems like a sensible solution at a time when there are bigger issues on the table.
• Has your team gone above and beyond the call of duty this year? Utility Week’s Stars Awards, celebrating the unsung heroes of utilities, are back for their third year. Due to popular demand, we’ve extended the entry deadline for just one week, to 18 March. The winners will be unveiled at the Hilton Manchester on 17 June. Go to www.utilityweekstars.co.uk to enter.
Ellen Bennett, Editor, ellen.bennett@fav-house.com
For all the news and analysis of the CMA provisional remedies due to be published after Utility Week goes to press, visit:
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