The Future System Operator (FSO) will limit its focus to the main transmission network when creating a Centralised Strategic Network Plan, only getting involved in local level planning when necessary.
Ofgem issued the clarification after transmission owners raised concerns over “scope creep” in relation to the FSO’s intended role of central network planner.
The regulator acknowledged that its proposals outlined in a July consultation did imply that the FSO would assume some responsibility for planning reinforcements to the local transmission network to connect new generation and demand.
Ofgem said transmission owners perceived this proposed scope as transferring much of their current responsibility for load-related network planning to the FSO. They said this would represent a significant change in their roles, which would no longer correspond to their licence obligations and statutory responsibilities, for example, concerning the Security and Quality of Supply Standard (SQSS).
Transmission owners warned this “scope creep” could also put the delivery of the CSNP at risk by over-burdening the FSO. They said their experience and expertise means they are best placed to undertake network planning.
Issuing its decision on FSO’s remit for developing the plan, Ofgem clarified that transmission owners will retain responsibility for planning reinforcements to local transmission networks to accommodate specific generation and demand connections, which will be outside the scope of the CSNP.
However, the regulator also noted that there may instances where it will be necessary for transmission owners and the FSO to work together on local network planning, for example, in instances where a local reinforcement forms part of a wider strategic upgrade.
“More generally, we expect that the TOs’ load-related and asset replacement for local transmission network planning to inform, and be informed by the CSNP, where the interactions with the wider network are relevant,” it added.
Ofgem said transmission owners will likewise retain responsibility for developing and putting forward options to meet the wider needs on the main transmission system that are identified by the FSO. But it said the FSO will also be able to put forward its own options when it believes it would be beneficial to do so.
The regulator additionally confirmed its decision that the first longer-term CSNP, covering a 25-year horizon, should be published in 2026 and updated every three years thereafter. It said the plan will cover onshore, offshore and cross-border transmission network needs, providing a firm pipeline of build recommendations for the first 12 years and a funnel of potential projects over the full horizon.
It said the FSO should also publish shorter-term annual updates to move potential projects into the delivery pipeline as their need becomes clear, and signal opportunities for transmission owners and third parties to address residual network constraints up to 12 years ahead.
Ofgem also confirmed that Electricity System Operator’s annual Future Energy Scenarios (FES) should become “pathways” showing what must happen to achieve the UK’s net zero targets: “Compared to the current scenarios produced under the FES, we expect pathways to be specific about the type, timing, location, and scale of investment needed, rather than illustrate possible changes in consumer or generation developments that could lead to net zero being achieved.”
The regulator said the current “neutral” scenarios, “which are presented as equally credible outcomes,” do not chime with the FSO’s proposed role as government advisor. It had previously suggested that the ESO’s regular inclusion of a “falling short” scenario that is not complaint with the UK’s climate targets amounted to “planning to fail.”
Ofgem said the FSO should aim to produce a single short-term pathway to “pave the way for ambitious and urgent investments” that branches out into multiple pathways over the long term as the range of uncertainties widens. However, it said the FSO should also have the ability to present multiple short-term pathways if this is necessitated by “material uncertainties.”
The regulator said it will consult on the draft licence conditions required to implement its decisions concerning the FSO’s delivery of the CNSP, and the Strategic Spatial Energy Plan it will be informed by, in the first half of 2024.