Local Area Energy Planning: The Method

Ofgem has set out its proposals to “rewire Britain at a local level to deliver a greener and fairer energy system for British consumers”.

Local Area Energy Planning is a critical enabler of decarbonisation by helping transform local energy systems in support of UK Net Zero carbon commitments.

The concept of whole system Local Area Energy Planning was developed by Energy Systems Catapult in response to the challenge of decarbonising heat and transport – delivering cost-effective strategies that build the confidence needed to unlock investment in low carbon energy systems.

Ofgem commissioned methodology

Ofgem proposals include new measures for local networks to support rising electricity demand from electric vehicles and heat pumps in smarter ways, including through new technology like battery storage, and a fair approach to delivering investment to support a greener emissions-free Britain while keeping costs as low as possible.

These proposals include a methodology report commissioned by Ofgem and developed by Energy System Catapult and the Centre for Sustainable Energy describing the purpose and value of Local Area Energy Planning (LAEP). It identifies four critical elements of LAEP and sets out quality criteria for each element which together define what LAEP ‘done well’ involves.

Read the Report

Local Area Energy Planning: The Method, as referenced in Ofgem’s RIIO‐ED2 Sector Specific Methodology Consultation Document

The report has been informed by input of a Steering Group including the Department for Business Energy and Industrial Strategy (BEIS), the Committee on Climate Change (CCC), the Scottish Government, the Welsh Government and Innovate UK.

The methodology report is part of a wider project commissioned by Ofgem which also reviewed (1) the different approaches currently available to model local energy systems and (2) how local area energy planning could support better planning, stakeholder engagement and investment decisions in energy networks across GB.

Defining the purpose and process for Local Area Energy Planning

Local Area Energy Planning (LAEP) is a process which has the potential to inform, shape and enable key aspects of the transition to a net zero carbon energy system.

Meeting the challenge of energy system decarbonisation needs local leadership, engagement and initiative‐taking. This is because of both (a) the nature and challenges of the systemic changes required (and how they vary between places) and (b) the sheer volume and distribution of people and organisations who will need to be involved in making them.

If done well, LAEP can provide sound foundations for effective and sustained local action to cut carbon emissions taken by well‐informed local leaders and initiative‐takers. The resulting plan can potentially underpin specific proposals to upgrade local energy networks to enable decarbonisation in line with local objectives. Done well and consistently across many localities, LAEP can inform sharper, more effective and better targeted national policies.

4 key elements for Local Area Energy Planning

The resulting report, Local Area Energy Planning: The Method, outlines the four key elements that constitute LAEP and which in combination can ensure these positive outcomes are achieved.

  1. The use of robust technical evidence produced using analytical techniques which consider the whole energy system and make consistent use of available data, and whose strengths and weaknesses are well understood.
  2. A comprehensive assessment of wider non‐technical factors which need to be understood and addressed to secure change.
  3. A well designed and involving social process which engages appropriate stakeholders effectively, uses the technical evidence appropriately, and manages vested interests effectively, thus ensuring the resulting plan can be seen as an informed and legitimate representation of local intent in relation to energy system decarbonisation.
  4. A credible and sustained approach to governance and delivery.

Centre for Sustainable Energy CEO, Simon Roberts, said:“It is important to see all of these elements as equally critical. Without an effective social process, the buy‐in of stakeholders, and an understanding of all the changes needed to succeed, any results from technical modelling will remain an interesting set of data, graphs and maps; it will not become a plan being put into action.”

Energy Systems Catapult Director, Richard Halsey, said: “Scaling up a more effective whole system approach to local area energy planning in the early 2020’s is a critical enabler to translating our national net zero commitments meaningful action in different places and helping to unlock the investment needed in smart local energy systems.”

The report sets out how each of these critical elements of LAEP can be done well, including describing key issues to consider and techniques which could be applied. It provides guidance for those looking to undertake, commission, fund, or simply participate in LAEP on how to approach the different aspects of the process.

By outlining criteria for good quality LAEP – the ‘done well’ checklists for each of the four elements – the document also provides a quality assessment framework. These ‘done well’ criteria can help guide the design and delivery of the LAEP process and also enable a systematic assessment of the resulting plan’s analytical quality, representative legitimacy and likelihood of delivery.

The methodology report will enable LAEP to be undertaken on a more consistent basis in different places across Great Britain and that the process produces more reliable and informative outputs which are therefore more useful at the local, regional and national levels.

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