Unlocking Grid Capacity to Deliver Net Zero

The Issue

All the electricity that powers our way of life in the UK; homes, offices, shops, factories and more, is transported from power plants that generate electricity to the consumer via the electrical network commonly called the “grid”. First constructed in 1935, the grid has gone without a major update in over 63 years, during which time our electricity production capacity has increased by almost sixfold (as of 2021) and is nearing the upper limit of its ability to carry the electricity we need. This is further compounded by the race to decarbonise our way of life, which has meant the introduction of a significant amount of renewable energy generation assets, that are predominantly intermittent electricity generators (meaning they produce power at random and inconsistent times as opposed to providing reliable base-load power).

The result is a capacity issue, meaning that at times when supply exceeds grid capacity, payments are made to energy producers, usually wind farms, to shut down and limit the energy entering the grid. As we look to deploy more renewable generators to reach net zero by 2050, the lack of grid capacity becomes increasingly important. There are over 1000 projects in the queue to the connect to the grid, worth more than ￡200 billion and with a total capacity of 176GW. This is roughly double the current capacity of the grid.

Since the network is not currently capable of accepting the amount of power waiting to connect, the delay to obtain a grid connection has now reached 15 years. These wait times could impact investment for new renewable projects in the UK as it competes with more attractive overseas options, such as the $369 billion US climate change subsidies.

However, National Grid are proactively working to reduce the wait times and speed up grid connections.

The Solution

In February 2023 National Grid ESO (NGESO) released their five-point plan detailing steps they are taking to significantly reduce the wait times for projects wanting to connect to the grid. The plan includes the following steps:

1.????Conducting a TEC (Transmission Entry Capacity) amnesty so that developers can leave the queue without paying a fine as they normally would, freeing up capacity in the queue and allowing projects that want to connect to be able to do so faster. The amnesty ended in April 2023.

2.????Changing the modelling assumptions to reflect connection rates and reducing the assumption that most projects in the queue will connect, as 60-70% of projects never actually make it to the grid.

3.????Changing the treatment of storage projects to 0MW allowing them to connect to the grid faster and free up space in the queue.

4.????Managing the queue in a more efficient way than the current “first come, first serve” system to allow projects that are actually progressing to connect sooner and remove projects that are not.

5.????Development of an interim connection offer for storage projects enabling them to connect to the grid sooner. However, they will be required to switch off when the grid is under stress without being paid to do so.

Building on their five-point plan, NGESO have put step 4 of their plan into action. They’ve written to all parties currently seeking to connect to the transmission grid asking for updates on their progress and project milestones.

Projects that aren’t progressing and won’t meet their connection date will be offered the option to move backwards or leave the queue, making way for projects that want to connect and are delivering on their milestones.

NGESO hope these solutions will reduce the waiting time of 70% of pipeline projects with a connection date after 2026 by at least two years and potentially up to ten years. Adding to this, Ofgem has stated that they will allow the National Grid to collect ￡20 billion from customers over the next 40 years to apply the upgrades necessary for the grid to be able tackle larger capacities.

The Benefits

There are a multitude of benefits that come with these improvements, including being able to carry more clean energy across the UK but also to Europe via the various interconnectors. Furthermore, connecting all these projects to the grid will result in capacity skyrocketing from the current 109GW (including batteries) up to 285GW, propelling us significantly towards our goal of net zero. This could attract investors to spend money, boosting the UK’s GVA by a predicted ￡4-11 billion by 2050. These changes will also greatly contribute to the UK’s energy security and independence, helping the UK to become more self-sufficient.