Great Britain (GB) is currently at a crucial tipping point in the transition to a decarbonised energy system. The transformation of our electricity network, from one reliant on large, centralised dispatchable gas generation to a more decentralised, low-carbon system, will be the largest project of its kind since the 1960s.
This transition calls for the connection of new wind and solar generation, new nuclear power stations and much-needed energy storage, while also transitioning existing gas generation toward low-carbon gas or abatement technologies. Doing so means major reforms to the way connecting to and building the network is currently managed and regulated.
As Energy UK sits on the main boards, steering groups, and advisory groups coordinating and delivering the actions across this area of reform, this series of blogs will shed light on the current state of electricity connections reforms and analyse the key blockers to this process.
This first post will set out the state of play and give an overview of how the challenges are being addressed.
The network today
GB’s electricity networks are among the longest established in the world. We built our power networks in the 1920s, linking up dozens of individual regional and town networks. In response to rapid population growth, the 1950s-60s saw the creation of the ‘supergrid’, connecting the whole nation to new coal and gas generators.
Today, nearly every household in Britain has access to electricity – something we take for granted nowadays but at the time was transformational to people’s lives. It is not an exaggeration to say that it was one of the greatest engineering projects in our nation’s history and required a significant amount of planning, coordination, public support and, importantly, political will. All factors that will play an equally important role today as we contemplate the next modernisation phase; delivering a net-zero energy system requires a similar level of ambition.
We must slash the current average 11-13 years it takes to connect new energy sources to the network and deliver new infrastructure.
While Britain has made notable progress in reducing energy emissions over the last decade with low-carbon generation now supplying around half the nation’s needs, we have now reached a point where further action is needed for that momentum to continue. Hitting the UK’s legally binding decarbonisation targets means we must slash the current average of 11-13 years it takes to connect new energy sources to the network and deliver new network infrastructure.
Previously, network companies largely only had to respond to rising energy demand in line with gradual economic and population growth and build out the additional capacity accordingly. The connection of new generation to meet new demand was incremental and, in the interest of pushing consumer bills as low as possible, was done on a just-in-time basis instead of investing ahead of expected need. As a result, connection applications are currently managed by the Electricity System Operator (ESO) and network companies on a first come-first-served basis.
The queue for connections now sits at more than 700 GW, almost three times the capacity GB will need in 2050. This is in some part due to speculative applications and a low bar to entering the queue, with no requirement for applicants to display true intention to build anything to connect.
Existing policy
To date, various policy initiatives have been introduced to help bring about the change in approach needed, principally the Accelerated Strategic Transmission Investment (ASTI) project, the Transmission Acceleration Action Plan (TAAP), and the Connections Action Plan (CAP).
The ASTI decision identified 26 strategic transmission projects that were seen as essential for expected renewable deployment during the 2020s. These projects are being taken forward under a streamlined regulatory approval and funding process. This process represents a significant departure from the multiple regulatory assessment stages required in the existing network investment approval process and has already delivered improvements broadly welcomed by the sector.
Following the publication of the Winser Review of Electricity Transmission Connections, the Government and Ofgem published the CAP and TAAP, to set out further actions.
TAAP focuses on broader reform to accelerate the deployment of electricity transmission grid infrastructure. This most notably involves the creation of a Strategic Spatial Energy Plan (SSEP) to more centrally map out needed energy infrastructure.
Other TAAP initiatives include:
- Creating standardised equipment designs.
- Reforming the regulatory approval process.
- Streamlining planning permission processes.
- Enabling the supply chain for transmission.
- Setting up mechanisms for communities to directly benefit from nearby energy infrastructure.
- Identifying the skills gaps and actions needed.
The CAP in turn focuses on five priority action areas to speed up network connections processes. These priorities are:
- Raising entry requirements to the connections queue through land permit requirements.
- Removing stalled projects in the connection queue by moving from the current ‘first come, first served’ regime to ‘first ready, first connected’. Work is now ongoing to implement the code reforms needed for this regime.
- Better utilise the existing network by creating streamlined connection arrangements for energy storage that can free up capacity and enabling the sharing and reallocation of transmission infrastructure.
- Better allocating capacity that is freed up through various initiatives under the ESO’s ‘5 Point Plan’ and the Energy Network Association’s (ENA’s) ‘3 Point Plan’.
- Improving data and processes and sharpening obligations and incentives to improve the quality of customer service and timeliness of connections.
Remaining gaps in policy
Despite the clear urgency with which various bodies are working to progress these needed reforms under TAAP and CAP, challenges remain.
First, other ongoing processes are affecting the investment decisions of energy project developers, including the Review of Electricity Market Arrangements (REMA), the reform of Energy Codes, the reform of Transmission Network Use of System (TNUoS) charges, and, crucially, the SSEP. Delivering the mixture of technologies needed for a decarbonised electricity system means harmonising all of these processes.
Second, if the connection process moves towards the currently proposed ‘first-come, first connected’ regime, the progression of connection agreements and offering of accelerated connection dates would be dependent on the securing and progression of land rights. This would lead to a rapid increase in the number of projects seeking planning permits from local authorities at a time when they are not sufficiently staffed or resourced to rapidly progress such applications. So, the resources available across the planning, environmental consents, and connections processes cannot be overlooked if we are to move at the required speed.
The UK faces competition for the investment that can bring jobs, growth, and export potential.
Third, there is uncertainty about the level of reliance on ‘non-firm’ connections within the CAP and under what circumstances and timescales they can expect to transition to ‘firm’ connections. Without clearly defined regulations, non-firm connections could result in a more confusing and complex business models for connecting parties (scaring off investment), more curtailment and balancing costs passed on to consumers, and a more strained energy system.
Finally, while these existing measures are important first steps, they will not in themselves resolve the entire connections challenge. This is based on the scale of the queue, something the ESO acknowledges, so more work is required to ensure GB connects enough low-carbon generation by 2030, by 2035, and towards 2050.
Streamlining the process for connections of needed infrastructure, while also identifying projects that are unlikely to be delivered at all, is critical to reducing timelines. However, it must be done carefully to ensure that investment in the UK is not impacted by either an inability to get a firm connection in a timely manner or an onerous set of pre-connection requirements. The whole world is moving towards a clean energy future, and the UK faces competition for the investment that can bring jobs, growth, and export potential.
If the UK is to be a world leader in clean energy and technologies and meet its raft of ambitious targets, then rapid improvements to connections processes and the delivery of significant energy infrastructure at pace will be a critical challenge for the new Government.
The next article will explore further the Government’s largest challenge regarding the future of the network: the need to move from the reformed ‘first ready, first connected’ regime to one based on strategic spatial planning.