Energy Code Reform: Governance Framework (2021)

The IET welcomes the opportunity to comment on an open consultation by the Department of Business, Energy and Industrial Strategy (BEIS) on Energy Code Reform: Governance Framework.

We agree that the main roles of the Strategic Function should be to identify and analyse how the Government’s strategic vision for the energy sector and related policy priorities (including net zero by 2050), current and future trends in the energy market, and the emergence of innovative technologies create the need for changes across the code landscape.

Such changes must be applied in a holistic way across codes.  However, since the publication of the earlier consultation on Reforming the Energy Industry Codes in 2019, the subsequent proposal to create an FSO provides an opportunity to reconsider the overall model and which party would be best suited to deliver the Strategic Function.

The consultation asks to what extent we agree with a range of areas, including:

• Licensing of a code manager for in-scope engineering standards
• Detailed roles and responsibilities of the strategic function
• Proposed roles and responsibilities of the code manager function
• Proposed roles and responsibilities of stakeholders, including the role of the stakeholder advisory forums
• Proposed options for appealing decisions made by Ofgem on material code changes
• Other potential appeal routes
• Operating model and accountability structure for Ofgem as the strategic body

The IET believes:

1. Governance needs to extend beyond code governance and should embrace relevant industry standards to ensure future technological and market developments are captured.
2. The proposal to create a Future System Operator (FSO) provides an opportunity to reconsider the overall model and which party would be best suited to deliver the Strategic Function. We believe that this model should be an independent executive public body that integrates of relevant functions of the FSO and Ofgem with the FSO performing the Strategic Function and Ofgem having overall responsibility for coordination of the activities of Code Managers.
3. Code Managers should be responsible for code management, changes and development and should take decisions on whether to approve a change to enter the change process; and on whether to approve non-material code changes.
4. There is now an urgent need to adopt a whole energy system perspective taking into full consideration interactions between the energy sector and other sectors such as transport and agriculture.