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Future of local energy institutions and governance (2022)

The IET welcomes the opportunity to respond to Ofgem on this important call for input, which is particularly timely following Ofgem’s and BEIS’s now closed joint consultation on the Future System Operator to which The IET provided a comprehensive response.

We are therefore pleased to provide a similarly full response to this call for input. In preparing this response, The IET has engaged a range of professionals from within its membership.

These include members with expertise in electricity system planning and operation, electricity markets, and digital infrastructure, some of whom are actively engaged in local energy initiatives.

In so doing The IET has accessed a wide range of expertise and experience in disciplines relevant to local area energy planning.

Our response is non-confidential and The IET is therefore content for it to be published in full on Ofgem’s website.

We include responses to all 13 questions below, but our overarching views can be summarised as follows:

  • The energy system needs to change profoundly if it is to decarbonise affordably whilst remaining resilient and secure.
  • Whilst energy infrastructure for heat and transport is of national strategic importance, its development will take place largely at a local (or regional) level, and hence this will also be a function of local area energy planning.
  • Local or regional approaches can respond to user’s needs and make best use of available resources. Local or regional approaches can also engage users on the wider decarbonisation journey. Importantly, local, or regional approaches can recognise in useful detail the interactions between energy and other systems in society and help to deliver wider social goals and co-benefits of healthy societies, such as inclusive growth.
  • The IET recognises that Ofgem’s remit does not currently extend across this wider social agenda, and that the capacity and knowledge to drive activity is often limited outside the established energy sector. Nevertheless, great care should be taken not to limit the transformational change opportunities that a more local, digitalised, integrated energy system can bring.
  • Local area energy planning is a golden opportunity to establish regional whole system strategies, including energy, water, digital and transport (not only electricity) with a focus on place-based needs and opportunities that would appear opaque from a central planning perspective. The benefits of such strategies will include faster, more affordable decarbonisation, better stewardship of natural capital, and more healthy, inclusive, and prosperous societies.