West Midlands Regional Energy System Operator (RESO)
The RESO project has explored giving cities and localities a stronger role within the UK’s established model of energy market regulation.
Lead Organisation
Energy Capital (Part of West Midlands Combined Authority)
URL
coventry.gov.uk/climate-change/reso
Location
West Midlands
About the project
The project explored the hypothesis that giving cities and localities a stronger role offers significant potential for releasing additional value, particularly given the need to transition the UK economy to net zero.
It has developed an innovative system operator framework with a strong regional focus, capable of combining the planning and development of the energy system and the wider local planning and service-delivery roles of local authorities.
What did the project achieve?
- A clear, deliverable, and well-articulated framework for developing the regional energy system operator (RESO) concept.
- A cost-benefit analysis for a RESO in Coventry which estimates its present value at £721m over the next 30 years.
- Four detailed Coventry Future Energy Scenarios (CFES), covering electricity, heat, and transport.
- RESO market design which identifies nine individual markets and explores three in detail – a market for helping avoid electricity network reinforcement costs, a market for trading electricity connection rights, and a local hydrogen procurement market.
Key lessons learnt
- A progressive, least-regrets pathway to RESO implementation is possible, starting with data governance and whole system planning.
- Benefits of delivering RESO go beyond reduction of energy costs and include wider societal and economic benefits such a stronger local economy (estimated at £144m over the next decade).
- The RESO proposals are entirely consistent with current proposals for a national Future System Operator (FSO) and could potentially reduce implementation cost.
Next steps
- Test a prototype RESO in action. Work closely with government, Ofgem and the network operators to develop, test and implement a RESO within the context of an FSO.
- Build wider public sector support for whole systems energy planning undertaken locally, through active participation of local authorities, the M10 group (representing Metropolitan Mayors) and other public bodies.
- Support future projects to develop the proposed financial framework.