Ofgem sets out proposals to transform local energy systems

Ofgem is today consulting on the next steps in establishing a more decentralised, decarbonised and dynamic energy system in Great Britain.

It is publishing two papers which will form part of Ofgem’s wider reform agenda, working with the Department for Energy Security and Net Zero, to promote more flexible and efficient use of energy across Great Britain.

Akshay Kaul, Interim Director of Infrastructure and Security of Supply, said: “We need a radical rethink of the energy system, markets and grid to establish a net zero power system by 2035 and net zero economy by 2050. The role of local communities will be critical. That’s why we’re suggesting ways to make Britain’s energy systems and markets participatory and transparent."

“The energy crisis underlines the urgent need to shift from volatile fossil fuels to clean energy. Our economic security requires us breaking the link between cheaper renewables and expensive hydrocarbons; accelerating access to homegrown, clean and secure energy; cutting strain on the grid and freeing capacity for renewable power."

The first paper, 'Future of Local Energy Institutions and Governance': is a consultation to create a stronger, clearer allocation of local responsibility with relation to energy for three key functions: planning, market facilitation and operation.

This builds on many trials and pilots which showcase how local smart energy systems reduce system costs, accelerate the take up of electric vehicles and heat pumps and help ensure we can accommodate more renewable energy output.

The second titled 'Future of Distributed Flexibility': is a call for input from across industry about building the world’s first distributed energy 'super’ marketplace. This includes specific digital concepts that will help unite existing markets and optimise the demand and supply of renewable electricity. 

Akshay Kaul said: “We are exploring options so net zero networks are planned, governed and regulated strategically at regional and local level – so we have flexible, clean generation and distribution systems right down to street-by-street, town-by-town, home-by-home level. We are considering new independent regional energy system planners to ensure plans are cohesive, coherent and clear to all.”

Find out more here.