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.
Energy Capital (Part of West Midlands Combined Authority)
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.
- 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.