Ofgem call for input on local energy institutions and governance


Vital consultation for community energy - deadline 7 June 2022

Consultation document 

Press release

CEE's work in progress draft response

Ofgem have published a Call for Input into the ‘Future of local energy institutions and governance’. The purpose of this consultation is to examine the institutional and governance arrangements needed, at sub-national level, “to drive the most cost-effective decarbonisation outcomes, and as part of this on the relationships between planning,  markets and operation". 

This consultation report makes no reference to communities, community energy or the systems that would need to be put in places to make this sector thrive. We have written to Ofgem to point this out.

They have responded urging responses from communities. They say this is the beginning of the process and that broad engagement will be key to arriving at the right conclusions. Ofgem stated that they are in listening mode and that they are open to hearing new ideas, and the consultation mentions that they are open to accepting options even if thay are not entirely in their remit and are working with other organisaitons such as the government departments at BEIS and DLUHC to address any matters that arise.

They will be organising workshops in June and we have registered interest of the sector and will publicise as soon as we have further details.

We at CEE, are keen that the voice of the community energy sector is represented within the reponses received by Ofgem and urge organisations to respond, so that the requirements of CE can be seen amongst the “right conclusions”. To aid this we have put together some guidance, below, of some of the key points within the consultation and CEE’s stance on the matter.

We would say that negotiating the transition to net zero locally is about much more than "energy system planning, market facilitation of flexible resources and real time operation of local energy networks". We need local assets (community owned), the process to be facilitated and held locally (community energy), local knowledge, local people consenting and actively involved....

The ask 13 questions copied below around the framing above and their 'four scenarios' illustrated below.

It is not necessary to be bound by the questions but they are as follows:

1. Are the three energy system functions we outline (energy system planning, market facilitation of flexible resources and real time operation of local energy networks) the ones we should be focusing on to address the energy system changes we outline?

2. Do you agree with the criteria we have set out for assessing the effectiveness of institutional and governance arrangements?

3. Do you agree with our assessment of how far the current institutional arrangements are, or are not, well suited to deliver the three key energy system functions?

4. Overall, what do you consider the biggest blocker to the realisation of effective energy system planning and operation at sub-national level?

5. Do you agree with the opportunities of change we outline and the potential benefits they may create?

6. Are there additional opportunities for change and benefits that we have not set out?

7. We set out a number of risks associated with change. Do you agree with these risks and the potential costs they create? Are there additional risks of change and costs that have not been set out?

8. For each model, we have set out the key assumptions which need to be true for the model to offer the right solution. Which of these assumptions do you agree with?

9. Out of the framework models we have developed which, if any, offer the most advantages compared to the status quo? If you believe there is another, better model please propose it.

10. What do you consider to be the biggest implementation challenges we should focus on mitigating?

11. Taking into account the varying degrees of separation of DSO roles from DNOs under framework model 1, do you consider there are additional measures we should consider implementing, in particular in the short term (e.g. changes in accountability etc)?

12. Are there other key changes taking place in the energy sector which we have not identified and should take account of?

13. What do you consider to be the most important interactions which should drive our project timelines?