Energy planning

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Most societies are deeply dependent on the use of fossil fuel to support the lifestyles of their members. To reduce the use of fossil fuel represents a task of very high technical and social complexity and therefore success in such endeavour requires the use of the Engineer-it strategies.

Actions that governments take to reduce the use of fossil fuels has the greatest potential for reducing their use. It is therefore essential that their policies for energy are engineered.

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."

It is of extreme importance to society that a body such as the proposed FSO be charged with making proposals for energy policy. We advise that the urgent action be taken to establish the Future System Operator.

Many people do not understand the need for an FSO and are very sceptical about the potential for such a body to be successful. We argue that the need for such a body is manifest and that, provided it is appropriately constituted, it can be highly successful.

Here the term electricity system encompasses generation, transmission and distribution whereas the energy system includes the electricity system, the gas system, energy for transport,  for heating, etc.

System planning

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 transmission and generation 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 (p20))

We assert that changes to the electricity system must be based on system planning rather than on market signals.  Such planning implies that:

  • Before making decisions, all proposals are comprehensively assessed against the requirements and against other options. Unintended consequences are identified and the risk of negative outcomes is controlled.
  • After decisions have been implemented, the system is actively monitored to detect and correct flaws and to continuously improve performance.

The consultation document has a section on Energy Market Design (p39). For example, the Capacity Market for minimising the price of providing power at peak demand is discussed. That provision only addresses the price of one of the features of the system.  It is the system cost that should be minimised; it is the system that needs to be designed.  Under system planning, proposals for what facilities should be built, where they should be built and when they should be built emerge from assessments. Suppliers would bid to provide facilities that had been specified by the FSO to be optimum in the context. Using cost planning strategies, suppliers would be adequately paid, but not overpaid, and customers would not be overcharged.

Reasons why the electricity system requires to be subject to system planning include:

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.

  • It behaves as a system - as a set of interdependent parts. It should not be compared with car manufacturers competing for market share but with a single car, the parts of which are mutually dependent.
  • 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.(more). The models are key tools that underpin a system design and investment planning process.
  • The system should be classified as safety critical (see 'Duty of care' below) because of the level of harm that would result from a major blackout.

Potential for success in system planning

A common reaction to a proposal that system planning should be used, is that it would not work - that government bodies cannot be relied on to produce good outcomes.  Such a view does not stand up to analysis. System planning:

  • is widely used in society.  It is the default setting in professional engineering, in science, in medicine, in business, etc.
  • is used in government - but is not being used for energy planning.
  • was used very successfully for the electricity system prior to 1990.
  • is older than the pyramids.

See The importance of system planning (below) for more detailed information on this issue.

Attributes of the FSO organisation

It is recommended that the Future System Operator should have the following attributes:

  1. It should be a not-for-profit body
  2. It should have statutory powers that will allow it to work for the common good.
  3. All involved must work together to seek to achieve the goals for energy taking appropriate account of the risks.
  4. A whole-system, whole-life, holistic approach would be used. All the consequences of introducing changes are assessed.
  5. The most advanced technologies should be applied in the drive to achieve its goals.
  6. 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.
  7. 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.
  8. 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.
  9. The line and boundaries of responsibility for all functions of the electricity system should be clearly defined.
  10. It must have authority to ensure that plans are implemented.
  11. It should operate under an audited quality management system to seek to ensure that the objectives are being competently addressed.

Duty of care

In structural engineering design, four levels (0 to 3) of 'Consequence class' are defined based on the level of risk associated with collapse of the structure.  The higher the level of consequence class the more intense the required assessment for safety. The highest level, Class 3, corresponds to 'safety critical' situations where the consequence of failure can be many deaths and/or major social and economic harm. (For example, designs for long span bridges, tall buildings and stadium roofs are allocated to Class 3). Under the requirements for Class 3 contexts, once an initial design has be carried out by a firm of consulting engineers in accordance with design codes of practice, the design information is passed to a second firm of consultants who repeat the calculations. If there are discrepancies between the two results, the differences have to be resolved.  This is a very effective way of reducing the risk of structural collapse. Structural engineers have a duty of care to ensure that people will not suffer injury due to a structural collapse.

The GB electricity system should be designated as safety critical. The risk of major blackouts is increasing and such events cause major societal and economic harm. Although there are codes for the performance of the electricity system, they are not being used to the limits of their potential to justify decisions about changes to the generation mix. Far from having a second independent comprehensive check for safety, changes to the electricity system are  being made without ensuring that all the risks are addressed.

Those responsible for making changes to the electricity system also have a duty of care to ensure that their actions do not result in to harm to others. It should be a role of the Future System Operator that proposals for changes to the electricity system are assessed using advanced risk control methods.

The cost of changes to the electricity system should also be classed as safety critical: Increases in electricity prices are resulting in severe social harm.  But the costs of changes to the system are not being reliably estimated.

Proposals for action

Proposals for energy policy tend to be put together by government ministers based on advice from a range of sources. The FSO should be charged with making proposals that are based on assessments that have been very carefully evaluated (for example using state-of-the-art modelling). It would then be up to ministers to accept or not to accept such proposals but they should work to a principle that proposals should only be acted on if they had been subject to thorough testing.  This strategy would not reduce the authority or responsibility of the ministers but would significantly reduce the risk of making inappropriate decisions.

Planning for the energy system

While the electricity system must be treated as an integrated entity that has to be subject to system planning, this is not the case for all aspects of energy supply and operation.  For example, it would not be appropriate for the government to take over planning of car manufacturing in order to convert to low emissions vehicles.  It is however essential that, whatever measures are adopted by government to effect changes to the energy system, they should be based on well thought-out proposals that have been tested against requirements, against options and against the risk of unintended consequences.

The importance of system planning

System planning for public works

In October 2021, the Institution of Engineers in Scotland inducted James Newlands to the Scottish Engineering Hall of Fame. In 1847 Newlands took up the appointment of Borough Engineer of Liverpool. In a 2014 paper about James Newlands, Sally Sheard wrote:

"By the 1830s the deterioration in urban health in many towns and cities was provoking national debate, within a predominant culture of laissez-faire – the Englishman’s home is his castle principle (Sheard and Power, 2000).

The challenges Newlands successfully addressed in mid-nineteenth century Liverpool –integrated urban design, adequate funding, multi-disciplinary team working – remain critical to urban health now."


Newlands designed and built a sewer system for Liverpool that, after 20 years, resulted in a doubling of the life expectancy of the people of Liverpool who had lived in highly unsanitary conditions.  His appointment as Borough Engineer was a pivotal event in the improvement in public health in the UK. Liverpool Town Council recognised that that something radical had to be done about the condition of the town sewers. Despite opposition from supporters of the 'culture of laissez faire', the sewer system was planned as an integrated entity recognising that the dominant public good issues could not be addressed by private enterprise.

Following Liverpool's lead, the City of London created a Metropolitan Commission of Sewers that led to a new and highly effective sewer system. Other cities followed. The need for municipal planning for sewage and water supply became the norm - to the great advantage of the nation.

While this introduction of system planning for public works was innovative in mid-19th century UK, from a historical perspective, it was not a new concept.  The Romans were masters in the use of system planning for the supply of water and the disposal of sewage.

System planning for the electricity system

Despite opposition from members of parliament who believed that competition was essential, the 1926 Electricity Act enabled 'Electricity Commissioners' to use system planning to create the National Grid, that greatly improved reliability and, between 1926 and 1960, significantly reduced the price of electricity in real terms - see Engineeering for Energy, page 9.

Pre-1990 the 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. They were not-for-profit organisations.


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