National Grid has launched a consultation on its plans for the electricity system operator in 2018/19 as it undergoes legal separation from the rest of the group at the behest of Ofgem.

The firm has outlined the long list of actions it will take over the year to increase competition, aid coordination across transmission and distribution networks and improve customer service.

To reduce balancing costs, the system operator will increase the competitive provision of services by reducing barriers to entry and maximising the ability of all potential providers to compete. This will include delivering new dispatch capabilities to enable the participation of smaller distributed energy resources. It will begin surveying market diversity and the satisfaction of new entrants and publish a new roadmap for the future of balancing services.

The forecasting of balancing charges and requirements, transmission charges, demand, wind and solar generation, and CO2 intensity will all be improved to provide greater visibility to market participants. Balancing costs will be reported and reviewed on a monthly basis.

The system operator will also increase transparency over the reasoning behind procurement decisions when buying services through tenders, auctions or in the balancing mechanism, for example, by trialling and then implementing tender result webinars.

The Networks Options Assessment process will be expanded to ensure the power grid can cope with not only peak demand but also peak renewable output and minimum demand. Where improvements are needed it will consider a full range of upgrades, covering smart controls as well as reinforcements to transmission and distribution networks.

The system operator will work with network companies to begin the rollout of regional plans for the joined-up development and operation of transmission and distribution networks to lower connection times and costs. The cross-industry maintenance and system security planning process will be improved to help networks deliver upgrades and routine maintenance on time and reduce the impact of delays.

IT systems will be updated and a new forum will be launched to examine customer interfaces.

National Grid has additionally laid out details on the legal separation of the system operator from the transmission business, which is due to take place by 1 April 2019 in accordance with the orders of Ofgem.

It will have an entirely separate board, including three independent directors from outside National Grid. Employees will be located in a different office to the rest of the company and managers and executives will be incentivised solely on the basis of the system operator’s performance. Data will be ring-fenced to ensure the transmission business only has access to information available to other transmission owners.

National Grid is holding a consultation event for the work plan on 22 February and the deadline for responses is 5 March.

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