Preparing the way for Clean Power by 2030

Delivering operability and markets solutions for the future of the energy system in Britain sits at the heart of our work at the National Energy System Operator (NESO). 

Last year, the UK Government set a new challenge for NESO and the wider energy industry – delivering a clean power system by 2030. While this new ambition requires a herculean effort across the energy sector, the foundations for achieving this ambition were set over six years ago.

In 2019, our predecessor organisation, National Grid ESO, announced the ambition to be able to operate the national electricity system using zero carbon generation sources, for short periods of time, by 2025 – a G7 first.

This ambition is about more than simply reaching net zero or decarbonising Britain’s power system, it’s about making the network operations more efficient and capable of handling the ever-changing energy generation mix.

An electricity system once powered by coal now operates without it. Over the last decade, instead of replacing coal plants solely with gas or nuclear, Britain has integrated hundreds, if not thousands, of new generation technologies.

Now, as NESO, we're nearing the goal of re-engineering Britain’s electricity network to operate using zero carbon sources when market conditions permit, reducing the reliance on fossil fuels. 

What we are doing to get ready

As we set out in our new Operability Strategy Report and Electricity Markets Roadmap, in the last year we have delivered further improvements to not only support our 2025 ambition but to also deliver wider improvements for the industry across our markets and operations.

Through the introduction of the Open Balancing Platform, we're reimagining how we can and need to dispatch bulk power.

This journey started over 20 years ago, when we could balance the grid by making less than 100 decisions a day. In contrast, by December last year, we saw over 10,000 balancing actions taken in a single day.

Although there is much more to do to unlock the full potential of Britain’s diverse energy generation, the progress made to-date has evolved the grid and enabled competition in our markets, reducing the costs of the services we provide.

In 2024, the costs of balancing the electricity system stayed largely the same as in 2023, despite an almost 50% increase in the number of actions delivered by our control room.

Britain’s changing electricity generation mix will also bring new operability issues that we proactively address and resolve before they arise.

We continue to procure cutting edge stability services, including first-of-a-kind grid-forming batteries, to deliver inertia that was once delivered largely by fossil fuel power stations.

These world-leading grid forming capabilities can contribute to system resilience, lower carbon emissions and reduce costs for consumers – roughly £500 million across these latest contracts.

We're committed to further driving down costs by working with industry to leverage new technologies and solutions to maintain the resilience of GB’s current and future electricity system.

Reforming our markets to incentivise new technology 

Part of driving down costs is evolving our markets to unlock future network resilience, and to incorporate new technology types into the energy system.

Our reforms are dedicated to enabling greater co-optimisation, stacking and locational procurement as we move away from our legacy products and embrace new, more efficient and targeted solutions to emerging and existing network requirements.

We aim to collaborate across the industry to enhance market access and participation and facilitate stacking and co-optimisation including across NESO’s and distribution network markets. Our Enduring Auction Capability has shown that stacking improves market liquidity and reduces costs. 

Our energy markets are an enabler of our collective decarbonisation, energy security and affordability goals, but they are only one part of a larger picture. 

Later this year the Government will deliver its final decisions on the Review of Electricity Market Arrangements. These decisions will set the long-term direction for future wholesale electricity market arrangements into the 2030s and beyond. We will continue to work closely with the Government, Ofgem and industry to finalise and then implement these new arrangements.

Conclusion

Being able to maximise the efficiency of the electricity system today and in future, is critical to delivering decarbonisation while maintaining system security and lowering costs for consumers.

We will continue to work across the industry to find new solutions across engineering, operations and markets to adequately meet this challenge. Working together we can achieve these goals and deliver the right outcomes for consumers.

Operability Strategy Report

Markets Roadmap