The Future System Operator (FSO)
Recent events have also highlighted the importance of energy security to our nation and the impact that the cost of energy has on all our lives. We require unparalleled change across the whole energy system, from wider adoption of technology and changes in consumer behaviour, to ensuring we have the right markets, networks and frameworks in place.
Traditionally, Britain’s energy system has been split into two areas – gas and electricity – but to deliver a sustainable, affordable and secure energy system, there is need for co-ordination across the whole energy system, with one single entity responsible for translating policy into immediate strategy.
An independent organisation that can design and co-ordinate across the whole energy system means we can deliver an energy system that is clean, affordable, and fair for everyone.
It is against this backdrop that BEIS and Ofgem have published their consultation response, and agreed to set up an expert, independent Future System Operator (FSO) with responsibilities across both the electricity and gas systems and the ability to expand its remit to additional energy vectors when needed. The FSO will be in the public sector, with operational independence from government.
Excitingly for the ESO, we are at the heart of this new company. With our new remit, we will be able to drive progress towards net zero, deliver value for consumers, improve whole energy system decision-making, and support energy security.
Kayte O’Neill, Director of Transformation
The creation of the Future System Operator is a great opportunity to develop an independent organisation. The FSO will provide a whole energy system view which will deliver value for consumers both today and tomorrow while maintaining security of supply. When the new company goes live, this is only the start, there is also scope to expand further into different vectors to provide a coordinated vision for the future.
What roles will the FSO undertake?
In addition to the existing roles the ESO undertakes today, including its BP2 commitments, the FSO will cover the following roles:
- Whole energy planning – strategic network planning and market strategy across both gas and electricity to provide a whole energy system view. This could also expand over time, to cover additional other energy sources such as hydrogen, heat, transport and CCUS.
- Advisory role – providing thought leadership and advice from a whole energy perspective to drive net zero, security of supply and affordability.
- Emergency preparedness – the FSO will provide a whole system view for energy resilience.
What are the timelines for the FSO?
The FSO could be established by or in 2024, with new roles and capability being introduced in a phased approach. Primary and secondary legislation is required to create the new public corporation, therefore these timelines are subject to change.
You can read about our indicative plan and costs to achieve the FSO in our BP2 plan.
What is the latest progress?
Kayte O’Neill, ESO Transformation Director and board member, is leading the transformation from the ESO to the FSO. We are currently working with stakeholders on defining what the new, independent FSO will look like.
We would love to hear your thoughts on the new roles the FSO will undertake and how the organisation can develop. To get in touch, please contact us by email.
An Energy Bill is currently progressing through parliament, which will legislate for the FSO’s creation. A factsheet about what is included in the FSO section of the Energy Bill can be found on the government's website.