Regulator rejoins Open Networks steering group

Ofgem is stepping up its involvement in Open Networks after being urged to take a more leading role in the flexibility market reform programme by Octopus Energy.

In an open letter, the regulator’s interim director, energy systems management and security Eleanor Warburton writes that Ofgem intends to rejoin the Open Networks steering board in order provide a “steer on regulatory and policy issues where required”.

The programme, which is run by the Energy Networks Association, is designed to improve co-ordination and standardisation of the disjointed market for flexibility services.

Warburton’s letter follows growing disquiet about the pace of progress on the Open Networks programme.

In its response to the House of Commons environmental audit committee’s inquiry into electrification, Octopus Energy says it is particularly concerned about the ENA “in terms of limiting the pace of progress towards achieving government targets”.

The supplier urges Ofgem to take a more leading role in setting milestones for Open Networks and reviewing its governance arrangements.

And in its report on the decarbonisation of the power sector, published in April, the Commons BEIS (business, energy and industrial strategy) committee called for Ofgem to put pressure on the ENA and the DNOs to ensure faster and more consistent implementation of Open Networks.

Warburton’s letter says Ofgem’s involvement will focus on clarifying regulatory or policy questions that may otherwise block progress; flagging interdependencies between Ofgem’s work and the Open Networks; supporting the implementation of the project’s new monitoring framework and helping set targets to ensure the programme delivers at pace.

The letter has been circulated to the chief executives of the ENA, the distribution network operators, DNOs and the National Grid Electricity Systems Operator.

Warburton says Ofgem expects the Open Networks 2023 workplan to be delivered in full. The letter also sets out minimum expectations for the programme’s flexibility tenders in summer 2024 and says Ofgem intends to publish a decision this autumn on future governance arrangements of Open Networks.

Avi Aithal, head of Open Networks at the ENA, said: “We’re pleased Ofgem has recognised the progress being made in supporting the delivery of local flexibility markets and we look forward to working with them closely as the programme accelerates. ENA’s Open Networks Programme has always been centred on enabling industry-wide collaboration and the entire programme welcomes their greater involvement.

“The key points Ofgem detailed in the letter reflect the outcome of work undertaken in our 2023 work plan and rapid progress is being made. We are keen to work with Ofgem and the wider industry to develop a delivery plan for 2024 and beyond, to ensure that the direction of travel is reflective of industry needs, with tangible outcomes similar to our 2023 work plan.”