What do regional energy systems operators look like in a net zero world?

What do regional energy systems operators look like in a net zero world?

Matthew Rhodes, Camirus Limited

This paper will present the preliminary findings from a two-year Innovate UK-funded project to design a regional energy system operator (RESO) model for the City of Coventry[1]. The project is exploring the institutional and governance frameworks necessary to support a just transition to a zero carbon energy system, in the context of comprehensive re-design of the city’s energy and transport infrastructure to deliver the necessary reductions in emissions.

The project is a partnership initiative including the gas and electricity distribution network operators as well as the strategic planning and transport authorities for the city and region and the universities of Warwick and Birmingham. It is evaluating governance and institutional options which effectively and efficiently address the challenges both of:

1. Aligning the planning and delivery of strategic infrastructure across energy, transport spatial and economic sectors to create the maximum opportunities for zero carbon outcomes at acceptable levels of societal risk
2. Enabling near-to-real-time optimisation of energy use through facilitating markets at appropriate spatial scales

The point of departure for the project is that existing energy market and political governance structures may not be the most appropriate for ensuring both a just transition to net zero and a transition of the necessary speed and scope, specifically given the nature of the technical and behavioural changes we know are required.

It is taking a first-principles approach to market and governance re-design, using a real city as a case study and working with the actual data and plans of the existing infrastructure and utility providers. Innovative visions of the future are provided through participation of the universities and a market-platform provider.

The project includes research on global institutional and governance models for low carbon energy systems at city region level and uses this to generate alternative options for future regional market governance, specifically considering the question of what governance and regulatory functions should sit at what scale (e.g., community, city-region, national).

A high-level methodology has also been developed to compare and evaluate the different options in the context of the real city case study. This leads to an initial assessment of likely benefits of costs of a more regionalised approach to energy market governance and recommendations for change.

The conference will be the first public testing of these findings.

Keywords: Markets; Governance; Regions; Institutional Design