US Chamber of Commerce calls for FSO clarity

The US Chamber of Commerce has called on the UK government to clarify the “specific responsibilities” of the Future System Operator (FSO).

The world’s largest business federation has also urged the government to put a greater focus on cutting emissions as well as asking for clarity on Ofgem’s role in supporting the UK’s energy ambitions.

It comes in response to the government’s energy policy strategy and policy statement consultation.

The consultation was published by the Department for Energy Security and Net Zero (DESNZ) in May and is seeking views on the proposed strategic priorities and policy outcomes set out in the strategy and policy statement.

In response to the consultation, the US Chamber of Commerce states that while the government’s strategy “appropriately acknowledges the forthcoming establishment” of the FSO “further clarity is required to outline the FSO’s role”.

It recommends that the government takes three actions in relation to the FSO. They include:

• Defining the FSO’s responsibilities
• Enabling regulatory flexibility for the FSO
• Emphasising the FSO role in innovative energy systems

The government and Ofgem confirmed plans in April last year to establish the FSO as an independent, publicly owned corporation by 2024.

The FSO will take on all of the existing roles and responsibilities of the Electricity System Operator (ESO) currently owned by National Grid as well as the long-term forecasting and strategic planning functions of the gas system operator owned by National Gas Transmission.

It will also take on new and enhanced responsibilities, including providing expert advice to the government and Ofgem and becoming a Central Network Planner for the electricity transmission network.

In April, Ofgem proposed to create a series of Regional System Planners across the country to coordinate the development of local energy system plans and identified the FSO as the most appropriate candidate to fulfil this role. The regulator also suggested that the FSO should become a neutral facilitator for flexibility markets.

Concerns about the role of the FSO have been raised repeatedly during the past year. In May, Energy UK warned that the “creeping scope” of the FSO will lead the new body to lose focus on its core functions.

Octopus raised similar concerns about the scope of the FSO’s remit and called for greater clarity on how the new body will be held accountable for its actions.

Other recommendations tabled by the US Chamber of Commerce include:

• Enabling Ofgem to respond swiftly to evolving market dynamics and technological advancements by granting regulatory flexibility
• Aligning government and Ofgem incentives
• Focusing more on emissions, not technologies
• Enhancing private-public partnerships to fund energy objectives