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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)
Head and shoulders photo of Simon Skillings, Senior Associate, E3G Photo: E3G
Simon Skillings, Senior Associate, E3G

Photo: E3G

One early task for the upcoming new UK government will be to oversee, along with the National Energy System Operator, development of the electricity grid necessary to support progress towards net zero. Here, Simon Skillings, Senior Associate at climate change think tank E3G, proposes a ‘Power System Delivery Office’ to take on the task.

Decarbonising electricity supply is an essential element of decarbonising our economy and will be key for reducing emissions in our homes, transport and industries. At its heart, decarbonisation in the UK is about electrification. There are clean power targets in place. It is now time to focus on turning commitments into action. This will only happen if the right delivery structure is put in place.

 

Across Europe, there is a huge effort underway to convert clean power targets into complete energy system designs, produce delivery plans and create the markets that ensure efficient investment in, and operation of, the required assets. In Great Britain a new National Energy System Operator (NESO) has been established to produce the system design and associated plans.

 

This has been a critical governance reform. The power system cannot be decarbonised without an expert, independent body to make decisions about the most cost-effective route and to create a coordinated, joined-up plan. This simply does not yet exist and as a result there have been huge delays to getting the right infrastructure built in the right place at the right time.

 

The creation of NESO will help to drive that power decarbonisation plan forward at speed.

 

Early warning of delivery risks
However, NESO will need to be supported by governance reforms to ensure upcoming risks and challenges are properly identified and navigated before they turn into a crisis. For example, supply chains may not be able to respond as expected, leading to slower delivery or higher costs. New technology options may prove much cheaper than those currently included in the plan. Retail markets may fail to foster the product innovation needed to encourage flexible consumption. Unforeseen challenges may emerge with those technologies that have not been proven at scale.

 

More – or less – renewable electricity may be available to import than expected. And gas prices might be very much higher or very much lower than anyone expects (indeed, history would suggest that one or the other is likely to happen).

 

Although NESO will be required to maintain an up-to-date inventory of key assumptions about the future and respond to government requests for advice, this falls short of the early warning function that is required. Decarbonising electricity supply at pace requires a mission-like focus. Relevant ministers will need to meet regularly to rapidly identify and implement the need for policy change in the face of these risks and opportunities. This requires a new function, undertaken independently, to co-ordinate delivery and ensure progress stays on track.

 

The power system cannot be decarbonised without an expert, independent body to make decisions about the most cost-effective route and to create a coordinated, joined-up plan.

 

Power system delivery co-ordination 
A ‘Power System Delivery Office’ is needed to constantly monitor progress, identify obstacles and propose remedies to ministers. It must ensure that an understanding of future risks and uncertainties is fully integrated into the plans produced by NESO. The goal should be to combine urgency of delivery with rapid learning and policy adaptation.

 

This function should not be undertaken from within a government department to avoid the risk of ministers ‘marking their own homework’. It could be added to the tasks being undertaken by NESO, but another set of independent eyes would add more value. The National Infrastructure Commission is perhaps the best home for this function. It should be mandated to undertake an ongoing audit of clean power delivery and produce annual reports on progress.

 

This function can only succeed with the close support of trusted industry advisors. It is businesses which will gain first insights on risks and opportunities. However, any advice that they provide risks being discounted due to suspicions of self-serving commercial interests. Representatives from consumer groups, independent academics, charities and trades unions should therefore also be involved. This will ensure that the assumptions underpinning plans and the policies defining markets are aligned with delivery requirements.

 

Transforming the electricity system at pace will inevitably increase the role of planning and government intervention. However, this must not be plagued by the rigidity and optimism bias associated with previous government planning initiatives. Political attention needs to move beyond objectives and focus on the implementation of an agile and coherent delivery governance process. NESO, backed by a Power System Delivery Office, can turbocharge that effort.

 

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.