The RESP policy framework decision this week provides lots of fresh detail on the establishment of Regional Energy Strategic Plans – the ambitious, democratic and locally informed process that will soon be at the heart of decisions about what energy infrastructure gets built and what the system looks like in the future. Here, we look at the key elements from this milestone development.
“The RESP Methodology should […] adopt a whole-system cross-vector perspective (i.e. gas and electricity, but also heat, transport and industry).”
Although the immediate focus is on the electricity distribution networks, the RESP process is very much looking to be ‘whole system’ and will influence gas development and/or decommissioning, transmission networks and cross-vector issues such as heat, transport and industry.
For energy networks this is an evolution of their current approaches, but for local areas this is a step change in how they engage in the energy system, from ad hoc towards more strategic engagement. The guide we produced with Innovate UK for the Net Zero Living Programme, Getting Ready for RESPs, highlights which steps local authorities need to start thinking about to engage effectively in these processes.
“In developing the RESP, NESO should be: place-based, whole-system, vision-led, proactive, transparent and collaborative, and be fair.”
We are pleased to see that the call for just transition as a principle gets a nod through the addition of guiding principles on fairness and transparency. The fairness element is important particularly to guide decision making when and if there are trade-offs or assessments of different options.
“RESP development will be supported by NESO’s delivery of a place-based engagement function and proportionate support for local authorities. NESO are expected to develop structured, transparent and accessible routes for local actors to engage with and inform the RESP.”
Although there had been some concerns in the consultation period about the capacity and role of NESO in terms of engagement with local actors, the decision firmly establishes that regional and local engagement is indeed the remit of the regional RESP teams. To deliver this, they will clearly need to be adequately resourced.
“NESO should develop proportionate forms of support for local authorities and local energy representatives [but we] maintain our view that funding and/or staff support for local projects and planning is outwith the remit of RESP.”
As the RESP policy has developed, local areas have consistently highlighted that many local authorities lack the capacity and knowledge to engage effectively with these processes. This decision makes clear that there will be some support from NESO, but not direct funding.
“We expect regional working groups to be a key mechanism to gather insights and views. We also note the potential for NESO to establish open-access regional forums to further enable meaningful participation in the RESP development.”
The decision notes that there will be targeted proportionate support provided by NESO, particularly around sharing best practice, digital tools and data consistency, to mitigate the risk of areas not being able to participate. The exact format of this support is likely to be an evolving area with NESO looking for feedback on how it can best support local areas.
“We set out a broad framework for the national and local level data sources which must be considered in RESPs and principles for assessing that data. Full criteria for assuring the credibility of data sources and how it informs the development of RESP outputs will be developed in the RESP methodology.”
Networks have been working for some time to develop their own engagement processes and data flows with local authorities, for example in Distribution Future Energy Scenarios, and others have been providing access to planning tools such as LAEP+. It will be important that the NESO methodology builds on these. We will see more in the consultation in November, which is expected to be similar in scope to the ones held previously for the SSEP and CSNP.
The role of local energy planning is also left as a matter for government, but a representation of the data inputs into the RESP makes it clear that LHEES, LAEPs and other local zero plans are important, if one of many local data inputs that are likely to be relevant. Figure 1 below also includes, for example, transport, heat networks and local spatial plans.
“The introduction of RESP does not change the accountabilities of local government or any actor with responsibility for spatial planning. That is a matter for Government. There is no requirement for those undertaking spatial planning or local energy planning to adhere to the direction of the RESP.”
Importantly, the RESP makes the link about the interaction with spatial planning. However, the reference is very high level, identifying that the RESPs will be useful for guiding spatial planning, but placing no requirement on spatial planning actors.
The link between energy planning and spatial planning is significant as the local planning system is a key mechanism for bringing forward clean energy projects. Regen has been working with the Royal Town Planning Institute to understand how local level energy planning can better inform spatial planning. This research will be published imminently.
We think there is a particular need to help local authority planners navigate this complex landscape to make the best decisions for their places. In this respect, RESP is another element that needs to be added to local considerations, along with the other strategic energy plans, the NPPF changes and not forgetting the Land Use Framework. It is likely that future clarity will be needed in terms of how these various plans interact to influence local decision making.
“For projects and plans at an earlier stage of development (e.g. a new heat network, EV transport hub or industrial cluster), we agree with stakeholder suggestions that NESO should establish an in-development register […] This will help to balance the need for the RESP to be based on credible inputs whilst capturing regional ambitions. We expect NESO to work with the relevant local actors to identify these projects.”
As well as the NESO methodology setting out more specifically which data points will feed into the process, it will also provide a process to evaluate the credibility of these inputs from local areas. As part of this, Ofgem noted the value of an ‘in-development register’ to track and make visible early stage projects to provide additional insight to support strategic investment.
The credibility assessment and in-development registers are clearly related. Local areas are going to be submitting a huge range in the information and data, all with varying levels of certainty, risk and timescales. Categorising this range of projects with differing levels of certainty/credibility – including those in early stages – is going to be critical to identify the best areas for strategic investment. However, within the credibility process it is also important to understand the potential circularity here; that having enough network capacity clearly makes a project or plan much more credible.
“Strategic Boards will be established in each area with members drawn from Distribution Network Operators, Gas Distribution Networks, devolved and local governments, and regional cross-sector bodies. NESO will refine the board design in line with regional characteristics, balancing the need for appropriate representation with a need to remain lean and purposeful.”
The decision provides additional clarity on the role of the regional boards, who will now have explicit sign-off of RESPs (where majority can be reached). It provides principles on the boards and their processes, including that they should be a balance of democratic, network and cross-sector stakeholders. The decision contains further questions about the exact representation that might work, but notes that the exact decision should be left up to regions themselves and the chair, which Ofgem believes should be NESO.
Strategic boards are expected to involve upper tier authorities in England and unitary authorities in Wales and Scotland. NESO will have a tricky time initially on deciding local authority representation as local government in England undergoes its shift to strategic authorities. In the longer term, in England the strategic/combined authorities are likely to take the seat, though all local authorities are expected to be one of the working groups that feed into the board.
There is also the establishment of the National Steering Committee to provide strategic guidance to NESO’s development of the RESP methodology. This is a missing piece of governance in a hub and spoke model – the committee providing governance for the hub and the regional RESP boards governing the spokes.
“On balance, we judge that a single RESP would be more efficient and effective in drawing together a coherent whole-system plan. This position reflects Scotland’s devolved status and is consistent with the approach agreed for Wales. […] While we recognise the challenge of representing varied needs may be particularly acute in parts of Scotland – for example in its many unique island communities – it is one that is shared to some extent by all RESPs. We expect NESO to design appropriate engagement and governance structures, including working groups, to meet this challenge.”
Boundaries of the RESPs are as expected, with a few boundaries adjusted for geography. Scotland has a single RESP; with consultation responses split evenly between one and two, the document does contain a question mark over whether splitting this might be a good idea and how to go about it. Any future changes to boundaries would be dealt with via the National Steering Committee.
“Fully updated RESPs will be published every three years and the datasets underpinning their development will be refreshed annually.”
Despite the three-year cycle, a regular process for input will be important for local authorities and other local actors to develop capacity and knowledge as well as the internal governance to effectively feed into RESP and energy decision making. It is important that, rather than developing one-off processes every three years (which can be perilously ad hoc), this becomes embedded in part of LA governance.
Where this sits within local authorities is a further question. As Figure 1 illustrates, energy has tendrils across many areas of local authorities: economic development, planning, transport and housing, as well as climate change and net zero.
In the decision on timescales, Ofgem notes that the three-year cycle does not explicitly align to network price controls, making the point that, given the RESP is the strategic direction, we can probably expect price controls to adjust to it, rather than the other way around. It also notes that, by not aligning to price controls, it hopes a long-term outlook is taken rather than one focusing on specific price control period. All valid points.
These elements should help local authorities clarify their ambitions and steer the focus of any local energy or net zero planning activities. We are excited to see where they end up.
The relatively deep granularity of the RESP plans (which will be down to Lower Layer Super Output Area), as well as the five elements of each regional plan, will have implications for those areas creating local energy plans, LAEPs, etc. As we highlighted in our recent report Enable, Embed, Enact, local authority-funded approaches to net zero energy planning do not look to replicate the RESP’s analysis, but instead focus on what local authorities can best do to input and influence those contexts, pathways and specifications, both annually during the data refresh and strategically at the three-year cycles of planning.
“The output should go beyond collating different regional targets to instead providing a comprehensive view of regional conditions and priorities. This view should draw on embedded regional engagement as well as relevant regional and national data sources to provide a rich understanding of factors that will shape the future energy needs and broader priorities of the region (e.g. regional demographics, decarbonisation ambitions, industrial geographies, local priorities, etc).”
This regional context is an exciting element of the plan. Local authorities already work together in strategic transport authorities and so we are keen to see what comes out of these in the energy space and how powerful the collective voice of regions can be in that. Regen has recently supported on the creation of the South West Energy Prospectus, which goes some way towards this. Creating these regional contexts also aligns (though perhaps not geographically…) with the government’s plan to create strategic authorities in England.
“RESP will identify areas of investment need which are of high economic and/or system value and necessary to the delivery of key regional priorities.”
The strategic investment specification is going to be the nub of these plans and is also a feature of the interim t-RESP processes. However, stakeholders are all likely to have a slightly different understanding on what strategic means for them, which will be interesting to tease out further in these processes. We anticipate that the RESP boards will spend quite a bit of time defining or exploring this.
With the new high housing targets top of mind for many local authorities, where these houses might be built – and the electrification of demand at those sites with low-carbon technologies – we are keen that RESP, and the interim t-RESP, is as cognisant as possible of where these are planned to be.
This is an exciting step forward, but there are still lots of details and methods to be developed or confirmed which require input from wider stakeholders. Regen will be continuing to support this policy development, including through the Net Zero Living programme.
Of particular significance will be the consultation on the RESP methodology, expected in November. There is also the consultation on the t-RESPs, expected in September. In addition, Ofgem states that it will be consulting on licence changes and accompanying guidance in the coming months to underpin the roles of NESO and network companies in developing the RESPs and integrating them into network planning processes.
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