As we transition to net zero, we will see rapid decarbonisation and decentralisation of generation and demand. Transforming the ways in which we generate electricity, heat our homes and power our vehicles will require radical changes across the energy system, with particular focus on the electricity distribution system.
Electricity distribution network operators (DNOs) have been building capabilities in planning, operating and market facilitation of flexible resources to drive more efficient development and use of the decarbonising electricity system. These capabilities are currently referred to as Distribution System Operation (DSO) roles. However, other institutions also play a role in facilitating the energy system transition at a sub-national level, including Gas Distribution Networks (GDNs) and Local Government, including local and combined authorities as well as other supporting bodies.
As the energy system undergoes the unprecedented transition to net zero, it is imperative that key energy system functions are performed by institutions with the competence, appropriate skillset and incentives to drive net zero at least cost, and that there is clear accountability and coordination in the delivery of these. This Call for Input begins our review into the effectiveness of institutional and governance arrangements at a sub-national level to support delivery of net zero at least cost, and the case for alternative approaches.
In this Call for Input, we set out and seek input from stakeholders on:
- The energy system functions needed at a sub-national level to facilitate the transition to net zero at least cost and the criteria we consider need to be met for effective delivery of these functions;
- The suitability of current and planned institutional and governance arrangements in place for delivery of these functions; and
- The opportunities and risks of change, and potential options for alternative arrangements.