The British government acquires the electrical system operator National Grid

National Grid has struck a deal to sell its electricity system operator (ESO) to the government for £630m, paving the way for the division to take public ownership.

The FTSE 100 utility said on Friday it expected the deal to be completed on October 1, when the government and regulator Ofgem aim to establish the National Energy System Operator (NESO).

National Grid’s ESO operates the control room that balances energy supply and demand in real time. Its sale follows the passage of the Energy Act in October 2023, which will allow ESO to become a public corporation that will act as the UK’s independent system operator and planner.

The government said NESO will “play a vital role in supporting Britain’s energy security, the transition to net zero and minimizing customer bills”.

The corporation is to be chaired by Paul Golby, former chief executive of E.ON UK.

National Grid said the final sale value of its ESO would be subject to “customary closing adjustments”.

The company operates energy networks on both sides of the Atlantic and earns most of its revenue from regulated settlements levied on energy bills.

Energy Secretary Ed Miliband said on Friday: “Today marks a milestone for Britain’s energy system as we bring in the publicly owned system operator to provide impartial, system-wide expertise in building a network fit for future.

“The new National Energy System Operator has a huge role to play in delivering on our mission to make the UK a clean energy superpower.

“This is another step forward by a government that is rushing to deal with the British people.”

John Pettigrew, CEO of National Grid, commented: “We look forward to working together with NESO to continue to accelerate the UK’s energy transition; accelerating the decarbonisation of the energy system for the digital, electrified economies of the future.”

In May, National Grid announced a £7bn capital increase as part of efforts to double its capital spending in the five years to March 2029, eventually estimated to be £60 billion.

The announcement came alongside a set of full-year results in which the company said operating profit fell eight per cent to £4.5bn, which it attributed to “non-cash exceptional charges”.

By CityAM

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