In a report, the committee has recommended that the National Grid, which owns and operates UK’s main gas network, should be split and transfer system operation to an independent operator at the national level and distribution operators at the regional level.
National Grid also operates the high-voltage electricity transmission network in England and Wales as well as manages power flows onto and around the grids.
Energy & Climate Change Committee chair Angus Brendan MacNeil 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.
"Distribution Network Operators (DNOs) remain somewhat blind to their energy flows and passive in managing them. DNOs must transition to a more active role as Distribution System Operators so that they can use smart technologies to manage ever-more complicated energy flows."
Assessing energy storage, demand side response (DSR), interconnection and other smart grid technologies, the committee has urged the government to deploy large scale storage as soon as possible.
It also recommends expansion of interconnection to help balance a low-carbon network.
Additionally, the report noted that the smart meters and a smart grid could enable this transition.
The government is also urged to set indicative targets for biomethane and hydrogen deployment in the gas grid as well as launch a Ofgem-managed regulatory framework to encourage investment in district heating.
