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Ed Miliband, the UK government’s “green energy” tzar, proudly announced he had received independent advice from a “new” company, NESO. 

The advice comes in the form of a report which, according to Miliband, “provides conclusive proof that clean power by 2030 is not only achievable but desirable.”

It’s not independent advice as Miliband claims when the sole shareholder of the company is the Secretary of State, who is currently Ed Miliband.  It’s akin to Miliband giving Miliband proof to support Miliband’s “clean power mission.”

To add insult to injury, the British taxpayer has just forked out £630 million for Miliband to acquire the company, now effectively a government department, with over 2,000 employees to provide Miliband with the “independent” advice and proof he needs to support his “mission.”

This is such a mess it’s difficult to know where to begin. Let’s begin with Miliband’s fateful tweet that has alerted the public to the scam Miliband is running.

Below are images of a Twitter thread Miliband posted on Tuesday boasting of his “independent” advice.  It takes the form of a report from a company called NESO of which, as it turns out, Miliband, as Secretary of State for the Department for Energy Security and Net Zero (“DESNZ”), is the sole shareholder.

Here’s what Roger Smithy had to say in response to Miliband’s thread:

But it gets worse for Miliband as Marcus quite rightly pointed out:

And here is the proof from Companies House that National Energy System Operator (“NESO”) is owned by the Secretary of State for DESNZ, which is currently Ed Miliband:

Table of Contents

NESO is Born, Publicly

On 13 September 2024, the Office of Gas and Electricity Markets, Ofgem, announced, “The Secretary of State for the Department for Energy Security and Net Zero (DESNZ) and the Gas and Electricity Markets Authority (GEMA) have decided to establish the National Energy System Operator (NESO).”

This decision followed a six-week consultation held by Ofgem during April and May 2024 regarding the Secretary of State for DESNZ’s proposal to “grant (or treat as granted) an Electricity System Operator (ESO) and a Gas System Planner (GSP) licence, and to make modifications to the conditions of other licences.” 

“When the company [NESO] is created, [it] will be designated as the Independent System Operator and Planner (ISOP) and hold an ESO and GSP licence. This includes the licences, new roles, financial design and incentives and consequential changes to other licences,” Ofgem’s consultation announcement stated.

NESO was not “created,” it was purchased.  And we briefly describe what NESO’s “new roles” are later in this article.

Ofgem’s announcement continued, “We are also consulting on the Direction that the Secretary of State proposes that will cause National Grid Electricity System Operator Limited’s [ESO] existing transmission licence to have effect as the ESO licence when NESO is designated as the ISOP.”

What this really means is that when NESO begins to “operate,” it will continue to do the same as ESO had previously done.  All that has changed is the ownership and the name; by prefixing Electricity System Operator (“ESO”) with the word “National,” ESO has become NESO.

At the time of Ofgem’s consultation, the Secretary for State for DESNZ was Conservative MP Claire Coutinho.  Ed Miliband took over as the Labour Secretary of State for DESNZ on 5 July 2024, two months before Ofgem announced the post-consultation decision to “establish” NESO.

On the same day of Ofgem’s announcement, 13 September, the UK government announced, “Decision made under Energy Act 2023 on change of Elexon ownership, transfer of Electricity System Operator (ESO) into public ownership, and licensing and designation of NESO.”

It was not merely a “transfer” of ownership, it was a purchase by the Government of an existing, trading company from National Grid.

The UK’s 2023 Energy Act established an independent system planner and operator to help accelerate Britain’s energy transition; “creating” NESO. It’s worth noting that it was decided at a later stage that not all of ESO’s operations would be sold to the Government. Elexon was a subsidiary of National Grid’s ESO (also sometimes referred to as “NGESO”) but it was separated from ESO when ESO’s operations were purchased by the UK government.

Elexon’s primary objective is to facilitate the smooth operation of the wholesale electricity market.  It administers the Balancing and Settlement Code (“BSC”), comparing actual electricity generation and consumption with planned volumes, and calculating prices for any discrepancies. They then transfer funds accordingly. Additionally, Elexon provides and procures services necessary to implement the BSC.

According to Energy Advice Hub, “[Elexon] has responsibility for implementing the Market-wide Half-Hourly Settlement (MHHS) programme which will see all electricity customers switching to smart meters.”

When Did NESO’s Operations Begin?

Also on 13 September, the UK government announced that the “new publicly owned body” NESO will “pave the way to a clean energy future.”

When the Government refers to a “new publicly owned body,” it is not referring to NESO being a new company.  A quick look at the filing history shows that NESO, formerly National Grid’s ESO, was incorporated on 16 October 2017 with 1 share at a value of £1.  The sole shareholder was National Grid Holdings One plc, which is owned by National Grid Plc, a publicly listed company.

The top ten shareholders of National Grid plc include global asset management companies such as BlackRock and Vanguard; institutions own 73% of the shares and 43% of the business is held by the top 25 shareholders, according to an article by Simply Wall St.  The company’s largest shareholder is BlackRock, with ownership of 8.8%.

On 29 March, the company subdivided the 1 share of £1 into 100 shares of 1 pence.  On 1 April 2019, NESO issued 330,000,000 shares at 1 pence each.  The total number of shares of the company then became 330,000,100 with a total value of £3,300,001. National Grid Holdings One plc was still the sole shareholder.

NESO remained dormant (not trading) until 2019.  The company submitted its first set of financial statements for the year ended March 2020.  They state that ESO became a legally separate business in April 2019 as agreed by Ofgem, the industry regulator, which explains all the activity with sub-dividing and issuing shares in March/April 2019.

According to the company’s second set of financial statements for the year ended March 2021, ESO’s mission included “preparing Britain’s electricity system to be able to run on purely zero-carbon electricity by 2025.”  And one of its ambitions is stated as “to be able to run a carbon-free electricity system by 2025, which will be crucial in helping the UK achieve its wider net-zero target.”

The financial statements also state, “When ESO became a legally separate company [in April 2019] within the National Grid Group, Ofgem committed to reviewing the arrangements within two years.”  In January 2021, Ofgem recommended that ESO be given more roles and responsibilities to “drive the UK to its net zero ambitions … They also highlighted further roles and responsibilities may require additional separation of the ESO from National Grid.”

It seems the plan for ESO, now named NESO, has been quietly implemented since at least April 2019.

NESO: The Purchase of ESO Excluding Elexon

On 1 October 2024, the Secretary of State for DESNZ became the person with significant control of the renamed NESO, meaning the Secretary of State holds 75% or more of the shares and the voting rights (as seen in the image at the beginning of this article).  A Confirmation Statement filed with Companies House on 15 October 2024 confirms that the Secretary of State owns all 330,000,100 shares (valued at ££3,300,001) and is thus the sole shareholder.

NESO “will support the UK’s energy security, help to keep bills down in the long term and accelerate the government’s clean power mission … It comes as the government today reached an agreement with National Grid to acquire the Electricity System Operator [ESO], which will be transferred to public ownership.”

It was not merely “transferred,” which gives the impression it was handed over to the Government with no money changing hands, it was purchased using taxpayers’ money.  The UK government paid National Grid £630 million to acquire ESO, and the change of name to NESO took effect on the day it was purchased.

As Addleshaw Goddard explained, “[NESO] operates on a not-for-profit basis, is licensed and regulated by Ofgem and funded through energy bills … In practice, [ESO] and NESO are the same company, it is only the ownership that has changed.”

However, as we mentioned before, not all of ESO’s operations were purchased by the Government.  Elexon Limited, which manages the BSC, matching electricity supply with demand in real-time, operates as a not-for-profit entity and is funded by market participants.  It was a subsidiary of ESO.  But when “the shares in [ESO] transferred to the Government, the ownership of Elexon transferred from [ESO] to the 13 energy companies that contributed the most to Elexon’s funding as of 1 January 2023, so that it remains a privately-owned company,” Addleshaw Goddard said.

In August 2024, Miliband modified the BSC and the standard conditions of electricity supply and generation licences to pave the way for the transfer of Elexon’s shares on 1 October to “certain licence holders.”

What Will NESO Be Responsible For?

As Energy Advice Hub explained, “NESO will take on ESO’s responsibility for keeping homes and businesses supplied with electricity, balancing output with consumption.” Regarding “balancing output with consumption,” Energy Advice Hub must be referring to strategic “balancing” decisions as opposed to the day-to-day balancing, particularly of prices, done by Elexon.  As will become clear, NESO’s focus is on decarbonising the UK economy and the targets set to achieve that.

Additionally, Energy Advice Hub said, NESO will have a few other new roles:

1. It will cover gas supply as well as electricity, carrying out strategic planning in relation to both networks.
2. It will work on strengthening the resilience of the energy system and reducing risks.
3. It will strengthen the UK’s energy security.
4. It will have strategic input on the UK’s decarbonisation strategy.

For items 1 to 3 above, we have to ask whether the DESNZ could have fulfilled these roles without purchasing a company.  As for point 4, we do not want to have a “decarbonisation strategy” and even if we did, again the Government could have turned to advisors rather than purchase a company to advise it. After all, isn’t that what the civil service is for, to support the Government to develop and implement its policies effectively?

It is claimed that NESO will be a publicly owned company, independent from government control.  But it is owned by and under the complete control of the Secretary of State for DESNZ.  The word “independent” is completely inappropriate in this context.

NESO Charges Included in Monthly Electricity Bills

“NESO will operate a not-for-profit model, licensed and regulated by the Office of Gas and Electricity Markets (Ofgem) and funded through everyone’s energy bills,” NESO’s website states.

On UK energy bills, NESO’s charge falls under network costs.  “Part of these costs are for ‘balancing services’ which is what we do – balancing supply and demand second by second,” NESO says.  These “balancing services” account for around 2% of the average household electricity bill.

NESO’s 2% charge is confusing because as we noted earlier in this article, Elexon, which matches electricity supply with demand in real-time, was separated from ESO and not purchased by the UK government.

Further into NESO’s webpage, its description of what network costs are confuses matters further.  “Network costs pay for the electricity cables that carry energy across the country into your home or business. Network companies charge your supplier an Ofgem-regulated price for their use of the network, and this goes towards maintaining, running and upgrading the networks,” NESO states. There’s no mention of “balancing services” and it seems to be entirely different from the network costs NESO referred to earlier on its webpage.

There is no date to indicate when NESO’s webpage was first uploaded or if there have been any updates since then.  The confusion regarding the 2% added to customers’ energy bill for “balancing services” may be that the NESO page was written when the organisation was National Grid’s subsidiary ESO and so still included ESO’s subsidiary Elexon.  If this is the case, perhaps the 2% charge for “balancing services” will not be included in the government-owned NESO’s charges. 

Another point to ponder is if the 2% charge does relate to Elexon’s activities, whether in whole or in part, then surely the largest funders of Elexon have been the public through paying for their energy bills – not the 13 companies to whom Elexon was transferred on 1 October because, as it’s claimed, they were its largest funders.

To get to the bottom of this mess surrounding who is providing “balancing services” and who is being paid to do so through our energy bills, we need someone who has experience in the sector to explain.

Worse than the 2% for “balancing services” that possibly funds a private non-profit, NESO explains that “two other factors [ ] account for just under 25% each of your bill – network costs, which is where NESO fits in as mentioned, and environmental and social obligation costs.” 

Presumably, the curious 2% “balancing services” charge is included in the 25% network costs.

But shockingly, roughly 25% of the energy bills we pay are charges for “environmental and social costs.”  What are these costs? NESO explains: “Environmental and social obligation costs are paid to larger energy suppliers which have to help pay for government energy policies. These costs cover schemes such as to support energy efficiency improvements in homes and businesses, to help vulnerable people and encourage take-up of renewable technology.”

“Encourage take-up of renewable technology”?  What technology? By whom? Using what encouragement?

As for helping vulnerable people, the UK government has recently cut the Winter Fuel Payment for pensioners, some of whom are among our most vulnerable citizens.  Will the “social costs” that larger energy companies pass on to energy consumers be reduced accordingly?  Don’t hold your breath; when a for-profit organisation has found an easy way to make more money, they’re not going to let go of the scheme simply because government policies have changed.  For-profit companies are quick to increase prices in response to government policies and slow to reduce them, if at all.

As Nigel Farage, Member of Parliament for Clacton, said at the beginning of last month, “The average energy bill has risen by £149 just as Labour takes the Winter Fuel Payment away from millions of pensioners.”

In March 2024, before Mad Miliband’s dash for “clean power,” the UK was already the 11^th most expensive country in the world for household electricity prices.

After explaining that half of our electricity bill relates to “environmental and social costs,” NESO has the audacity to conclude its ‘Understanding your electricity bill’ webpage: “Something that is in your gift, is to adopt some simple habits that will reduce your electricity consumption. See my electricity consumption for tips on how to save electricity and help the environment too.”

This is enough to make anyone’s blood boil, especially considering NESO’s stated objectives.  NESO has three objectives according to the Energy Act 2023:  In NESO’s words:

• delivery of the government’s carbon budgets and 2050 target,
• ensuring security of supply to existing and future customers of electricity and gases, and
• promoting efficient, coordinated and economical whole energy systems.

“Whole energy systems” sounds like a Globalist buzzword that is meaningless and is just thrown in to make them feel good about themselves and their nefarious causes while leaving the rest of us saying, “Huh, what are you on about?”

Are We Being Had?

The bottom line is: The UK taxpayer has just paid £630 million – for a not-for-profit organisation – to the likes of BlackRock and Vanguard to purchase what is effectively a government department with more than 2,000 employees to advise the Government on how to decarbonise the UK economy, to help Miliband with his “clean power mission.”

Let that sink in – more than 2,000 people to advise the UK government on how to decarbonise the economy. Insultingly, NESO proudly describes itself as “an independent publicly owned expert.”

As if that wasn’t enough, we will continue to be charged, accounting for around 50% of our monthly bills, to cover “environmental and social costs” – to implement the Government’s policies – while the Government reduces its social costs expenditure through, for example, cutting Winter Fuel Payments.

What do you think? Are we, the taxpayers and the energy consumers, getting value for our money? Or are we being scammed?

Featured image taken from ‘Energy price cap rise ‘worrying for families’, says Energy Secretary Ed Miliband’, Sky News, 23 August 2024 (left). National Energy System Operator (NESO) (right).