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RTPI response to BEIS and Ofgem consultation on flexible and responsive energy markets

The Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem launched a joint review to investigate what policy, legal and regulatory changes might be needed to ensure that the energy retail market is fit for the future. The review aimed to enable consumers to take advantage of the increased flexibility and lower costs of a smart, low-carbon energy system while appropriately safeguarding all consumers. It also aimed to support delivery of the government's commitment to fully decarbonising the energy system with net zero emissions across the whole economy. Recent changes to national planning policy across the UK have placed a greater emphasis on the need for need for local and strategic plans to be accompanied by strategic policies for infrastructure, including energy. These changes recognise that the UK's planning systems can and should play an important role in the transition to a smart, low-carbon energy system for both new and existing customers.

This can be achieved in numerous ways. For example, the plan-making process helps energy providers to identify the location and quantum of future infrastructure need in relation to other place-based objectives and provides a mechanism to enable coordinated infrastructure delivery across different interrelated sectors .

However, our upcoming report 'A smarter approach to infrastructure planning' found that planners face significant challenges when seeking to manage these processes, and for infrastructure providers seeking to engage with planning frameworks. Infrastructure planning is hindered by complex, multi-level governance arrangements, with limited incentives or mechanisms for infrastructure providers to engage at an early stage in planning or invest in capacity improvements ahead of demand. Our recent report Planning for a Smart Energy Future similarly found that planning policy and practice in England gives insufficient emphasis to smart energy and climate change, inhibiting the aforementioned energy transition.

In this context, the focus of this review should widen its scope beyond the focus on consumer prices and consider wider costs and benefits to place-making. This review should consider which forms of energy retail market are most compatible with existing governance structures for planning and development management, and ensure that proposed solutions are fully supportive of a plan-led and place-based approach to energy provision and decarbonisation. This could include looking at the role of regulation in shaping how energy providers engage during the plan-making process and structures which enable them to invest in advance of demand.

This review should also recognise that the planning systems in Scotland and Wales are going through periods of significant change. The devolved nations should be fully engaged with this review, and able to develop their own policies and initiatives.

Click to here to read the consultation

Click here to read our response

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