The UK’s energy regulator Ofgem has written to the National Energy System Operator (NESO), laying out the scope of future regional energy reforms.
The open letter states the expectations for the NESO in regard to establishing Regional Energy Strategic Plans (RESPs), which it calls “a critical building block” of the transition to a more strategically planned energy system.
Ofgem has asked Julian Leslie, NESO’s director of strategic planning, to deliver an RESP plan for each relevant region, consisting of an initial view of regional conditions and priorities, informed by regional stakeholders, short and long-term modelling predicting future supply and demand, specification of identified areas of strategic investment need within each region, development of pathways to such investment, and guidance for distribution network operators (DNOs) to ensure that these pathways are followed.
The letter urges NESO to ensure that the plans are coherent with each other and to ensure that they take into account national energy priorities as well as regional ones, while also encouraging as much detail in the plans as humanly possible.
Additionally, the letter praises NESO’s commitment to transparency and efficiency in the process so far, noting: “We are pleased to note NESO’s commitment to a “no surprises” approach to developing the transitional RESP output through a transparent process, with clear milestones, which involves stakeholders from the outset. We are supportive of your proposal to use Technical Working Groups and Regional Forums as a mechanism to develop and test the transitional RESP outputs. We are confident this will give stakeholders early sight of and opportunities for input to outputs which are critical to their own forecasting and planning.”
Timelines and governance
Deadlines for achieving set milestones on the RESP development path have also now been laid out by the regulator. Phase one scoping work on the plans is expected to be delivered by the end of Q1 2025, with a public consultation on drafts of the RESPs being submitted in September this year and final transitional RESP outputs in January 2026.
In order to ensure that the RESPs are delivered on time and to the expectations Ofgem has laid out in this letter, the regulator has stated that it will establish governance to oversee the development of these transitional RESP products, while also setting up regular meetings with senior officials to ensure that any issues are dealt with at the earliest possible opportunity. Furthermore, the letter notes that any potential delays to delivery timelines must be raised to Ofgem as soon as possible.
Ofgem concludes by noting that the scope of work and timeline for delivering the RESPs is “critical to our shared objectives” and thus asks NESO to undertake the work of delivering these plans ahead of the statutory licensing requirements that will legally require them to do so, before requesting a response from NESO by the end of February.
Major reforms ahead
The development of RESPs is part of a number of reforms being proposed or implemented by NESO and Ofgem.
Most recently, NESO has proposed a code modification to reform the grid connections queue and help cut “zombie” projects from the system. The body is suggesting implementing a Progression Connection Fee, that would penalise developers of projects that fail to progress at sufficient speed.
