Lack of grid capacity is a potential hurdle to the UK meeting its net zero targets. Many organisations are hoping to utilise renewable electricity generation as part of their decarbonisation process, but face waits until 2030 and onwards for connection.
Vital Energi’s Design Director, EC&I, Steve Kelly, sets out the challenges facing UK organisations and helps explain how they can navigate the UK’s thorny issue of grid capacity to develop viable energy projects which will propel them to net zero.
The electrical infrastructure in the UK has been evolving for over a century, from an individual and regionalised set of small supply networks to the UK National Grid Transmission Network and Distribution System that we have today. This is made up of 14 Distribution Network Operators (DNOs) and 17 Independent Distribution Network Operators (IDNOs).
Initially power generation was produced by strategically placed large fossil fuel generation plants such as coal and gas fired power stations that used a top-down approach to supplying end users via an electrical network. This was subsequently supplemented by Nuclear and Hydro electric generation.
To facilitate the mass movement of electrical energy from one point to another, a complex electrical network consisting of National Grid’s Transmission Network and localised Distribution Network Operators (DNO and IDNOs) were created to carry the power over long distances from the generation power plant to the customers that required power.
In addition to the larger power stations there has always been the ability for smaller, innovative, and greener embedded generation to be able to connect onto the network such as CHP, hydro and biomass, and more recently solar, wind and battery storage systems.
To further strengthen the Grid’s stability to provide power, a series of sub-sea interconnections have been installed from the UK to Belgium, France, Ireland, Netherlands and, more recently, Norway. This has enabled the bulk transfer of power to and from the European continent and provided us with stability and energy security.
Energy is now generated through a range of renewable and non/renewable sources, distributed and transmitted via the grid to businesses, homes and organisations.
Up until recently there has always been headroom on both the DNO and Transmission Network for embedded generation to be able to connect. These embedded generation schemes are generally made up of such technologies such as CHP (combined heat and power), biomass generators, roof and field mounted solar PV and have often been installed as part of wider schemes to reduce both energy consumption and carbon emissions and achieve BREEAM status for development.
Along with new forms of generation, additional loads are being introduced on the aging electrical infrastructure on both transmission and distribution systems. In line with net zero goals set by the government, consumers and the public are trying to reduce carbon usage and become net zero as soon as possible. This has resulted in initiatives to reduce the use of fuel and gas, and with the growing popularity of electric vehicles and home heat pumps, there is additional strain on the electrical network.
The additional load and generation that is trying to connect has put massive pressure on both the DNO’s local network and, more so, on the transmission network. Although it may be perceived that the additional generation and load may ‘net off’ it is often the location of the installed equipment that is the problem. For example, a new offshore wind farm in the northeast may be the ideal location in terms of wind, constructability, and planning, but if the load is required in the south, this puts substantial strain on the transmission network to deliver this required power through its current infrastructure. As well as the underground cables and overhead cable lines, all other parts of the electrical infrastructure, such as substations, need to be reviewed to ensure that they are capable of accommodating the new constraints that generation puts on it.
In a statement from National Grid, they said:
This is a phenomenal undertaking for National Grid, and it's going to take some time and resources to complete.
As of February 2023, the National Grid had a connections queue of 257MW worth of projects waiting to connect against a 147GW of low carbon requirement to achieve net zero. Unfortunately, only 30-40% of the applications in the queue materialise into an actual project. This has meant that new connections are being given a date of between 12-15years before they can connect, which are dates that are not acceptable to investors.
One cause for optimism is that the core players with the power to transform our grid infrastructure have all issued definitive indicators that there is appetite for reforms which will enable a stronger, more resilient, more flexible grid.
In order to try and free up capacity and remove the “speculative projects”, as of March 2023 the National Grid published a 5-point plan to help.
1) Operating a Transmission Entry Capacity Amnesty until April 2023, allowing developers to terminate their connection contracts without incurring liabilities, freeing up capacity in the queue.
2) Updating modelling assumptions to reflect current connection rates and reducing the assumption that most projects in the queue will connect.
3) Changing the treatment of storage, including batteries, on the network to allow them to connect faster and free up capacity for other projects.
4) Developing new contractual terms for connection contracts to manage the queue more efficiently so that those projects that are progressing can connect and those that are not can leave the queue.
5) A ‘soon-to-be-made’ offer of an interim option for storage projects to connect to the network sooner, but with the caveat that they may be required to turn off more frequently when the system is under stress without initially being paid to do so.
Additionally, OFGEM issued an open letter on future reforms to the electricity connections process, which focuses on reforms to deliver benefits to current and future customers, accelerate progress to net zero, begin to deliver as soon as possible, coordinate across onshore and offshore networks on the transmission and distribution grids and ensure the reforms are resilient to wider reforms.
In April 2023, the The Energy Networks Association (ENA) published a three-step plan to speed up connections to the grid. If successful, this will result in mature projects which are closer to delivery gaining priority. Another core priority is changing how transmission and distribution networks co-ordinate connections, improving their interactivity. The final of the three points aims to bring greater flexibility for storage customers through new contractual options.
A combination of the work being undertaken by National Grid, OFGEM and the ENA, alongside the new investment in the Grid infrastructure should enable projects to connect earlier than their proposed date, but these could still be 2030 onwards.
This issue has become such a frustration to investors and customers that the former Prime Minister, Rishi Sunak detailed changes needed to be made in his new approach to net zero speech given on the 20th September 2023.
Although there are encouraging noises being made by both National Grid and the Government, new connections will still be beyond most customers’ requirements for their own targets to reach net zero.
It is now more important than ever to ensure that grid applications are progressed as early as possible and that planning and funding is in place to ensure that “shovel ready” projects can connect to the grid as quickly as required and they are not sat in a queue awaiting a long connection date.
Additional mitigation measures can also be considered to overcome these timescales by ensuring that any proposed scheme does not significantly impact either the DNO's or Grid's existing network. Schemes such as Active Network Management, Curtailment schemes, export limitation, fault level reduction could be introduced into the design at an early stage, ensuring an early connection.
Communications should be started with the local Distribution Network Operator at the feasibility stage of the scheme. This will allow any potential limitations on the network to be known about in advance of a timely and costly application being submitted, and should also inform the size and design of the scheme. Early engagement with DNOs has enabled us to convert many schemes into real projects that might otherwise have been sat in a queue.
Many clients who wish to use renewable electricity generation as a way to decarbonise are now in a position where this is not viable within their set timeframe. If we scale this across the entire country, then it becomes a genuine barrier to the UK meeting its net zero targets.
Experienced energy partners, like Vital Energi, can help clients evolve their projects so that they are both technically and economically viable. All schemes are unique, so solutions need to be unique too, but by partnering with an experienced service provider, clients are able to access their considerable experience of finding creative solutions to unlock projects.
If you’d like to discuss your potential project and the options available to you then please get in touch with us.
