Local grids to play key role in energy planning, Ofgem confirms

Energy regulator Ofgem has announced its five-year vision and has said local energy institutions will play a key role in energy planning in future.  

This will be achieved through the creation of an independent Future System Operator (FSO) which will work as a strategic planner for the British energy system.  

Each of the six electricity distribution networks (DNOs) will face a licence condition to set a collaboration plan showing how they will work in partnership with stakeholders to develop local and regional Net Zero strategies.  

UK100, a network of local authorities from across the UK, has said this is a ‘significant win’ for local leaders and could align local energy needs with delivery.  

Chief Executive, Polly Billington, said: ‘We are delighted to see Ofgem acknowledging that collaboration between local and regional authorities and the distribution network operators is central to delivering Net Zero and a robust, flexible and resilient energy system. It is a significant win for local leaders and a vindication of UK100’s work to this point. 

‘We have been working with Ofgem and the DNOs to demonstrate why long-term local energy planning and network operation must go hand in hand. I’m delighted that Ofgem has confirmed it will put this vital collaboration on a regulatory footing.’  

Ofgem states: ‘As we noted at Draft Determinations, we consider that engaging with local authorities on future investment and planning options is part of the core business of DNOs, and consumers should not pay for additional incentives in this area.’  

The plan covering 2023 to 2028 also requires networks to invest more in cleaner, cheaper and homegrown energy and to support the transition away from fossil fuels.  

Ofgem Interim Director, Ashkay Kaul, said low-carbon energy sources will be needed to meet the expected growing electricity demand for heat pumps and electric vehicles.  

Photo by Thomas Despeyroux