Herbert Smith Freehills has advised National Grid Holdings One plc on its divestment of National Grid Electricity System Operator Limited (ESO) to the Department for Energy Security and Net Zero (DESNZ) for an enterprise value of £630 million, an industry-transforming transaction that aims to help the UK reach net zero goals.
The transfer will be effected by a transfer scheme under the Energy Act 2023. Following completion of the transfer, DESNZ intends to establish ESO as a new independent publicly-owned National Energy Systems Operator (NESO), with responsibility for strategically planning Great Britian’s energy infrastructure and operating the electricity system, ensuring power supply meets demand from homes and businesses across the country.
It is intended that NESO will play a crucial role in meeting the mission to deliver clean power by 2030. As part of this, the operator will be required to provide independent advice to the government and Ofgem on how to build an efficient energy system that will reduce bills for consumers and strengthen the UK’s energy security.
The Herbert Smith Freehills team was led by corporate M&A partners Silke Goldberg, James Palmer, Caroline Rae and Charles Steward and TMT partner David Coulling, supported by senior associate Jannis Bille and associates Polina Barnard and Zoe Asher.
Herbert Smith Freehills also provided specialist advice in a number of areas, including in relation to transitional and operational services (from senior associates Will Garton and Hugh Bannister), IP (led by partner Andrew Wells, with support from senior associate Victoria Horsey), and international and public law (led by partners Nusrat Zar, James Wood and Hannah Ambrose).
Silke Goldberg, partner and global head of Herbert Smith Freehills’ ESG practice, commented: “We are pleased to support National Grid in this landmark transaction. The creation of the independent National Energy System Operator (NESO) will bring significant change to the UK’s energy sector and constitutes a pivotal point for the country’s energy transition journey to net zero. Our team has provided legal support throughout the process, advising on complex corporate, regulatory and governance matters, to facilitate a seamless transition to NESO.”
