Ofgem calls for big shake-up of energy market

OFGEM today called for the biggest shake-up of the energy market in a hundred years, a move that would strip the National Grid of its role managing the electricity system in a bid to boost the race to net zero carbon emissions by 2050.

The watchdog said a new independent body to oversee the electricity market could save taxpayers towards £5 billion over the next 30 years.

That would effectively see parts of the energy market renationalised, a stark u-turn from the last time Ofgem considered the issue four years ago.

The government has already said it will review the management of the country’s energy system.

National Grid has managed the electricity market – matching supply and demand minute by minute – since privatisation in 1990. The system is paid for by consumers’ energy bills.

Ofgem chief executive Jonathan Brearley said: “The energy system needs to undergo the biggest transformation in over a century to meet Britain’s ambitious climate goals.”

A new independent body would “help bring forward green economic growth, accelerate our journey towards net zero and save consumers money” he added.

The government appeared to give a nod of approval.

Kwasi Kwarteng, the Business and Energy Secretary, said: “I welcome Ofgem’s contribution to the debate over the future structure of our energy system and will consider its recommendations thoroughly.”

National Grid said just that it would “work closely with government and with Ofgem over the coming months”. City analysts have argued that National Grid might be happy to give up its role as electricity systems operator since it is only a small percentage of revenues.

National Grid shares were today up 4p at 880p.

** Meanwhile, gigafactory firm Britishvolt, whose co-founder and chairman quit last month after it emerged he was convicted for tax fraud in Sweden, has appointed a new finance boss.

The arrival of William Reynolds as chief financial officer comes as the company embarks on the £2.6 billion development of the UK's first electric car battery plant, which is set to create 3,000 jobs in Blyth, Northumberland, and has been hailed as a strategically important development for the UK automotive industry

Britishvolt said Reynolds had a “proven track record” of raising billions for publicly traded and private companies, having worked in the energy and construction sectors at companies including AMOCO and Prisma Energy.