The journey to net zero demands radical changes across the energy system. Changes in the way we heat our homes, power our vehicles, and generate electricity are already happening. These changes will require significant new investment, especially in electricity network infrastructure, and it will mean changing how the system is planned and operated at the national and sub-national levels. To deliver this transition effectively, it is imperative that energy system functions are performed by institutions with the competence and appropriate skillset, and that there is clear accountability and coordination.
We began our review into governance and institutional arrangements at a sub-national level in April 2022 when we issued a Call for Input. The review focuses on the delivery of three key energy system functions that are critical to how distribution systems operate and ultimately transform: energy system planning, market facilitation of flexible resources and real time operations. In March 2023 we consulted on a proposed reform package for local governance arrangements. We received 83 responses, with stakeholders supporting our overall direction of travel.
Today we are publishing our decision on the reform to local governance arrangements. The key components of this decision are:
- Energy system planning: introduce Regional Energy Strategic Planners (RESPs) to ensure there is appropriate accountability and effective coordination for strategic planning at a sub-national level.
- Market facilitation of flexible resources: assign a market facilitation function to a single entity with sufficient expertise and capability to deliver more accessible, transparent, and coordinated flexibility markets.
- Real time operations: keep real time operations within the DNOs, ensuring clear accountability for network reliability and safety.