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Ofgem sets out plans for local energy governance

On Wednesday 15 November, Ofgem published its decision on the future of local energy institutions and governance. Ofgem’s decision aims to reform local governance arrangements such as energy system planning, and includes the introduction of regional energy strategic planners (RESPs) to ensure there is appropriate accountability and effective coordination for strategic planning on a regional level. The decision also sets out that a market facilitation function will be assigned to either Elexon or the Future System Operator (FSO), in order to fully utilise the value of the flexibility markets. The regulator said that it has also decided to keep real time operations with the Distribution Network Operators to ensure for clear accountability for network reliability and safety. A consultation is expected on the delivery body for the market facilitator role.

On the same day, the Electricity System Operator (ESO) announced that the FSO will be taking on the RESP role. This new body will ensure energy networks are regionally coordinated across fuel vectors and between geographies, with the right level of local input into the process as well as regional democratic oversight. The ESO commissioned Public First to carry out research to better understand how the system works for stakeholders today and where the gaps exist. The report emphasised that there could be genuine and practical benefits for local communities and the country more widely if both regional and national energy network planning were more effectively aligned and planned across different fuel vectors and institutions.  

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