Energy planning

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Most societies are deeply dependent on the use of fossil fuel to support the lifestyles of their members but the need to reduce dependeny on them is manifest. Actions that governments take have the greatest potential for reducing the use of fossil fuels. Because of the very high levels of complexity and uncertainty involved, it is essenttial that system planning i.e. the .'skilled management of complex uncertainty', is adopted in the actions that it takes.

In this article we focus on planning for the electricity system as an example of how system planning may be implemented.

Government planning for electricity

The Future System Operator proposal

The 2021 Joint Report on Energy Future System Operator Consultation, Ofgem (Office of Gas and Electricity Markets) and BEIS (Department for  Business, Energy and Industrial Strategy) states that:

"consulting on the establishment of an expert, impartial Future Systems Operator (FSO) with responsibilities across both the electricity and gas systems to drive progress towards net zero while maintaining energy security and minimising costs for consumers."

and that:

"key strategic decisions will need to be informed by whole-system insight and impartial, technical advice." (p20)

The FSO would therefore carry out system planning for both the electricity and the gas systems  In this document we focus on the electricity system but the FSO will need to take account of all energy issues that affect the energy goals.

Via its role as the Electricity System Operator (ESO), the privately owned National Grid Company (NGC) is required it to ensure that supply meets demand at all times. NGC has responsibility for planning the transmission system but it is not is not responsible for ensuring that future generation capacity requirements are satisfied.

The creation of an FSO will allow generation, transmission, and distribution to be part of an integrated plan where "key strategic decisions will need to be informed by whole-system insight and impartial, technical advice."  (BEIS/Ofgem consultation report - see link above).

Reasons for system planning

Reasons why system planning is needed for the electricity system include:

1. The existing arrangements for government planning of the electricity system is that proposals for action are drafted by ministers and civil servants. Detailed justification for what is proposed is not required and ministers therefore can and do make decisions based on proposals that have not been adequately assessed. The electricity system is a very complex technical entity and even with a high standard of assessment there will be risk of unsatisfactory outcomes. Accepting proposals for action for the electricity system made by people with no experience in power systems engineering who can include their own untested preferences, makes no sense. It is like requiring a lawyer or an accountant to prescribe treatment for a complex medical condition. For example, the continuing closure of coal, gas and nuclear generation in favour of intermittent wind and solar generation without planning to ensure that demand will be met at all times, will result in a dangerously unreliable system - see article on Reliability and Resilience.

2. The objectives are dominated by public good issues: the need for reliability, the need to have low emissions. Markets do not address public good issues but system planning does.

3. It behaves as a system - as a set of mutually dependent parts interconnected by the Grid.

4. Very effective computational models are available for predicting the behaviour of an electricity system. This modelling is used to ensure that that the system will meet standards for reliability and resilience with respect to: security of generation supply, system inertia, network fault recovery, synchronous generation, reactive power, black start recovery, etc.(see article on reliability and resilience). The models are key tools that underpin a system design and investment planning processes.

Core principles for system planning for the electricity system

1. Policy  The Government establishes the policy - the fundamental objectives.

2. Executive Group A multidisciplinary Executive Group as part of the Future System Operator organisation should be established. The members of the group should have experience in system planning and have an appropriate range of competencies. As far as is practical, they should not have any business or financial interests that would bias their judgement.  The leader of the team must have a track record of success in system planning. Autocratic management should be strictly avoided.

3.  Formulating proposals The Executive Group should look widely for proposals to be considered. At the early stages, all ideas are 'on the table'. Preconceptions and ideology are put to the side. Options should be thoroughly tested:

  • by taking account of all requirements, both objectives and constraints, addressing the complexity
  • against other proposals/options
  • using the most appropriate testing methods
  • by being open-minded, sceptical, avoiding bias, not jumping to conclusions

Based on the results of such analysis, proposals for action are made by the Executive Group.

4.  Transparency Unless there are national security issues, justification for major proposals for action should be available to the public who should be invited to make comments before decisions are made.

5.  Strategic decisions Strategy proposals are made by the Executive Group but decisions on strategy are made by government ministers or by Parliament with the important proviso that no proposal is accepted unless it has been tested as described in item 3 above. 

6. Review and Revise When working with complex uncertainty, despite all efforts at prevention, faults in outcomes are likely to occur. The performance of the system is monitored to identify deficiencies and make amendments. This should be carried out on a regular basis. This work should be under the control of the Executive Group.

Attributes of the FSO organisation

It is recommended that the Future System Operator has the following attributes:

  • It should be a not-for-profit body
  • It should have statutory powers that will allow it to work for the common good.
  • All involved must work together to seek to achieve the goals for energy taking appropriate account of the risks.
  • A whole-system, whole-life, holistic approach would be used. All the consequences of introducing changes are assessed.
  • The most advanced technologies should be applied in the drive to achieve its goals.
  • The staff must have the necessary range of high-level competence - technical competence, financial competence and especially competence in power system engineering. The staff should, as far as is practical, be free from political and commercial constraints. Where expertise is not available within the organisation, it should be procured from other sources.
  • It should be required to draw up long-term and short-term plans for situations where the Government seeks to make changes to energy production or use. For the electricity system, it should have powers to determine the types of plant that are to be built, where they are to be built and when they are to be commissioned.
  • The operation of the FSO should, with the exception of issues that relate to national security, be transparent to the public. Data should be made available so that members of the public can carry out studies independently of the Authority. Such contributions should be welcomed as having potential to help to achieve the system goals. Before major decisions are made, public consultations should be held about proposals.
  • The line and boundaries of responsibility for all functions of the electricity system should be clearly defined.
  • It must have authority to ensure that plans are implemented.
  • It should operate under an audited quality management system to seek to ensure that the objectives are being competently addressed.

Historical precedent

Despite opposition from members of the UK Parliament who believed that competition was essential, the 1926 Electricity Act enabled 'Electricity Commissioners' to use system planning that resulted in greatly improved reliability and significant reduction in the price of electricity in real terms - see Engineeering for Energy, page 9.

Pre-1990, the not-for-profit UK Electricity Boards (CEGB, SSEB and NSHEB) provided a reliable supply and worked successfully to keep costs down. They did forward planning that identified the optimum location and type of generation plant in relation to a range of issues such as system cost, fuel source proximity, operational flexibility, fuel supply security etc..


The opinions expressed do not necessarily reflect the views of IES.