The National Grid has reached an agreement with the UK government to sell its Electricity System Operator (ESO) for £630 million, in a move the government claims will help connect new generation clean energy projects to the electricity grid.

Under the National Grid, the ESO is responsible for operating the control rooms which balance the supply and demand of electricity in real time across the country.

Once taken into public ownership, the ESO will form part of the government’s new National Energy System Operator, set to start work on October 1st in support of the government’s race to net zero and will be headed by former E.ON CEO Dr Paul Golby, with Fintan Slye as the chief executive officer.

The Department for Energy Security and Net Zero said the NESO will work alongside GB Energy to deploy renewable energy projects, while overseeing the strategic planning and design of the country’s electricity and gas networks.

According to the government, the new energy operator will break down the silos which currently exist between the planning of electricity and gas systems, with independent oversight for the design of all energy networks.

It’s hoped the move will enable investors to build out new energy infrastructure with confidence in how their project will fit into the country’s wider clean energy plan following the passage of the Energy Act in October last year.

The Energy Act sets out the responsibilities of the new public body to maintain the UK’s energy supplies, protect energy consumers and plan for an efficient clean energy system that is fit for the future.  

That includes planning across electricity, gas and hydrogen, as well as renewable generation, storage and other emerging technologies like carbon capture usage and storage. 

Energy secretary, Ed Miliband, said:  “Today marks a milestone for Britain’s energy system as we bring the system operator into public ownership to provide impartial, whole-system expertise on building a network that is fit for the future.

“We need to move Britain off expensive, insecure fossil fuel markets, and onto clean, cheap homegrown power that we control. This is how we reduce bills in the long term, strengthen our energy independence and support skilled jobs across the country.” 

The government’s acquisition of the ESO comes on top of launching Great British Energy, lifting England’s onshore wind ban, approving four major solar farms and launching the Clean Energy Mission Control Centre. 

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John Pettigrew, chief executive of National Grid, said:  “We look forward to working together with NESO to continue to drive the UK’s energy transition forward at pace; accelerating the decarbonisation of the energy system for the digital, electrified economies of the future.”

The previous Conservative government decided to take the ESO out of National Grid’s hands due to worries about a potential conflict of interest, given the operator’s role in advising government officials, however the move was delayed due to the General Election.

National Grid said the “final cash consideration” for the sale is still subject to potential adjustments before the deal closes.