Regional planning role could overwhelm FSO

The Future System Operator (FSO) risks being overburdened with responsibility when it goes live in the next few years, a National Grid Electricity Distribution (NGED) director has warned.

Ben Godfrey was speaking following the publication of Ofgem’s recent consultation which proposed the creation of a series of regional system planners (RSPs) to coordinate the development of local energy system plans across Great Britain in collaboration with network operators and councils. The regulator said this role should be performed by a single independent entity with “multiple branches,” identifying the FSO as the lead candidate.

Godfrey, NGED’s director of distribution system operator, told Utility Week that his orgnaisation has concerns about the FSO replicating planning functions that are within the remit of the existing network operators.

He said: “Our main concern is about the operational delivery of how we get the National Grid Electricity System Operator (ESO), which is very, very competent at managing the electricity balancing system, and keeping everything in check, to being this FSO. It’s a different entity, it’s not quite been mobilised and what we don’t want to do is burden it with a level and depth of responsibility. So we’re very keen to see that the RSP grows in capability.

“Clearly, there might be a greater and deeper role for it further down the line. But in the short term, it really needs to focus on that higher level optimisation against gas and electric and transmission and distribution, and not overly replicate the planning functions that are within the remit of the existing network operators.”

In the consultation, Ofgem said DNOs would remain responsible for network planning activities but these would need to be aligned with the regional energy system plans. Local authorities would likewise remain responsible for spatial planning.

“It could be argued that having both existing actors and the RSPs undertaking ‘planning’ is a duplication – but we see a clear distinction,” said Ofgem. “The existing actors plan for their own assets and within their own competencies.

“We are proposing that the RSPs focus on their coordination and coherence: ensuring common starting points, facilitating dialogue and creating an independent strategic summary”.

Acknowledging this, Godfrey added: “Ofgem called that out, recognising the need for perhaps some limited but a very small amount of duplication.

“We will really see that the networks need to retain a large part of the planning function. And really the RSP function should be about optimising the magnitude of investment across those different entities.”

Ofgem suggested in the same consultation that the FSO could also be tasked with facilitating the delivery of flexibility markets, saying both this and the regional planning role would have “strong synergies” with the FSO’s national functions.

The FSO, which is due to be established as a public owned corporation as early as next year, has already been earmarked to take on all of the main roles of the ESO, as well as the planning, long-term forecasting and market strategy functions currently fulfilled by the system operator for gas.

It will also have a duty to advise Ofgem and government on the energy transition. There a re multiple other roles suggested for the FSO over time, including around the decarbonisation of heat and transport, as well as in hydrogen and carbon capture usage and storage. However, these will be subject to further consultation.