As the roles of parties evolve, it is important to consider whether they could give rise to conflicts of interest and if so how they should be mitigated. Government has been considering the case for a more independent electricity System Operator, working with Ofgem and National Grid. All three parties have concluded that a more independent System Operator can realise benefits for consumers by enabling a more secure, competitive and flexible system. We have published a joint statement setting out the intention for the System Operator to undertake a range of new activities to this end. We also set out the intention for it to become a separate company within National Grid Group, with a governance structure that mitigates potential or perceived conflicts of interest.
Ofgem are consulting on the principle of greater separation, the process that will be followed to achieve separation, and on how the roles of the new electricity System Operator company might need to evolve or be clarified. We want the System Operator to serve consumers by serving the market, with transparency as a default and markets and competition at the heart of all its activities.