Ready, set, connect: Britain launches landmark grid connection reform

“Queuing is a very British tradition”, says Chris Stark, “but the queue to connect to Britain’s grid has held back our economy”. Stark is head of mission control for the UK’s Clean Power 2030 (CP30) – an action plan to rapidly deploy enough clean energy to meet and possibly exceed the country’s energy appetite by the end of the decade.

The viability of the plan Stark is in charge of executing, rests on Britain addressing one of its more powerful headwinds – a renewables grid queue with collective capacity of over 700GW, roughly four times the CP30 target.

In a landmark overhaul of grid connection rules, the National Energy Systems Operator (NESO) announced a prioritised project list, in effect moving Britain away from its first come, first serve model.

Zombie projects

Older grid congestion rules, the regulator contends, had created a system that relied more on quantity and less on quality. Projects that were arguably less viable were holding up those that were not. ‘Zombie’ projects as they came to be known.

“We inherited a broken system where zombie projects were allowed to hold up grid connections for viable projects that will bring investment, jobs and economic growth”, commented the UK’s energy secretary Ed Miliband.

As a result, even ‘shovel ready’ renewable energy projects have had to wait their turn, at times for years on end. RenewableUK, a trade association says the status quo needed challenging.

“Reform of the queue for grid connections has been necessary to ensure that renewable energy projects which are ready to connect are prioritised, and that zombie projects are weeded out”, says Barnaby Wharton, RenewableUK’s head of flexibility and grid.

Needs assessment

To clear the gridlock, NESO embarked on a needs assessment. 60 industry workgroups, 172 consultation responses and 1500 applications later, NESO arrived at a priority connection pipeline spread over two phases, one for 2030 and the other for 2035.

Some technologies are already at capacity thresholds; others have some way to go.

Offshore wind, for example, is already at capacity for 2035. As are batteries. Solar is slightly undersupplied for 2035 while onshore wind is undersupplied in England and Wales while capacity in Scotland is above threshold.

In the case of the latter, the next priority window offers a chance, where NESO expects to prioritise projects that are already ready to connect.

In total, NESO’s prioritised pipeline holds 283GW of generation and storage capacity, coupled with 99GW of transmission potential.

“These changes will cut grid bottlenecks by prioritising ready-to-build projects, giving certainty about when and where they can connect and unlocking billions in clean energy investment”, says Kayte O’Neill, NESO’s chief operating officer.

Silver bullet

The reform creates a system tasked with a balancing act – one that incentivises project viability whilst protecting the entrepreneurial urge to innovate. Quality, industry representatives warn, is complementary to quantity.

“While it is important that the connections queue is reformed, we also need to ensure that we do not unnecessarily stifle future clean energy project development”, warns Wharton.

Balancing act aside, the reform is unlikely to be a silver bullet on its own. Energy UK, another trade association says other reforms must follow.

“The energy industry is keen to see planning and environmental processes further streamlined to ensure projects and infrastructure are built out efficiently across the country”, notes Dhara Vyas, Energy UK’s chief executive.

For investors, NESO’s needs-based connection process implies a fundamental shift in the investment case for renewable infrastructure. Hitherto, investors strong reasons to diversify - back more projects, across more technologies.

Now, their viability metrics will take the wheel. If the grids regulator focuses more on feasibility, investors will likely follow suit.