The energy security secretary will be granted powers to overrule the Future System Operator (FSO) if there is a perceived threat to national security under plans unveiled by the government.
A consultation published by the Department for Energy Security and Net Zero (DESNZ) outlines two new proposals concerning the creation of the FSO, which the government still anticipates will be operational next year.
Alongside the new powers being proposed for the secretary of state, the government is consulting on updating the FSO’s role in relation to energy security and resilience.
The consultation, published on the same day as the long-awaited report by the electricity networks commissioner, proposes a power for the DESNZ secretary to “direct the FSO to take, or not take, certain actions where there is a risk relating to national security that may detrimentally impact the resilience, safety or security of the energy system, or the continuity of essential services”.
This could, for example, entail ordering the FSO not to grant commercial contracts with external parties for goods or services, where these represent a risk relating to national security.
Explaining its rationale, the government highlighted how it is supported by intelligence agencies in leading national security policy and is therefore best placed to identify risks.
It added: “However, government currently has limited ability to provide direction on national security issues in the energy system, with existing legislation focussing on emergency powers where there is imminent severe risk to life.
“These powers cannot necessarily be used pre-emptively before an emergency has taken place, whereas national security concerns may not necessarily be urgent, but rather arise out of a long-term risk that government is managing.
“We are therefore proposing to have a power to allow the secretary of state to direct the FSO at any stage, including at an early stage to mitigate potential vulnerabilities before risks can materialise.”
It added that Ofgem would be responsible for enforcing non-compliance with a national security direction and the secretary of state can relieve the FSO of any obligation under its licences where that obligation conflicts with national security.
Elsewhere, the consultation proposes giving the FSO responsibility around planning for emergencies and boosting system resilience.
Under these proposals the FSO would “analyse and understand electricity system resilience” and use this understanding to advise the government, Ofgem and industry on risks and mitigations, working to support the development of rules and obligations for security and resilience.
The consultation adds that this role will also include supporting governmental reviews of Critical National Infrastructure (CNI), formalising a function the Electricity System Operator already performs.
There are also proposals for the FSO to provide annual reviews of emergency readiness processes, as well as reviews outlining the industry’s readiness for different seasons, “recommending best practice and improvements for emergency preparedness to DESNZ and Ofgem”.
Additionally, the FSO should provide the government and regulator with analysis following emergency situations, to help the sector learn and improve its resilience.
As well as the two consultation proposals, the document sets out other potential future roles of the FSO. These include around hydrogen strategic planning and future system network regulation.
“The detail and governance of these roles are still subject to further policy development, which are being led by the relevant policy area. They may require further consultation in future, where appropriate,” it added.