In its report, Low Carbon Network Infrastructure, the energy and climate change select committee said the National Grid, which managing the UK's electricity network, has too many conflicts of interest.
"We recommend creating an independent system operator (ISO). Despite strong efforts by National Grid itself and [regulator] Ofgem to mitigate the potential for conflicts of interest, it seems intractable and growing," the report said.
"Unnecessary asset development, or giving interconnectors an unfair advantage over existing and emerging balancing tools, could dilute the impact of other efforts to develop low-carbon network infrastructure.
"The government should set out its intentions regarding an ISO as soon as possible, and consult on a detailed, staged plan for their implementation, so as to avoid injecting uncertainty into the energy sector. In particular, it will be important to act in a fashion that retains National Grid's considerable technical expertise," the report said.
The chair of the committee, Angus MacNeil MP, said: "National Grid's technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The Independent system operator model has worked in the USA. It is time for it to be brought to these shores."
It might take a few years for the recommendations to be fully implemented, however, as the committee believes it would be complex process to switch to an ISO model.
"The role of system operator is complex and important, and should not be changed at a pace that would spook investors or outstrip the speed of appropriate regulatory development," the report said.
