Helen Stack, Regulatory Manager at Centrica, explores the steps that are being taken to improve access to new grid connections for businesses.
Reducing the UK’s reliance on carbon fuels requires a significant increase in renewable generation, like Solar PV and more efficient, flexible technologies, like Battery Storage. These should be complemented by electrification – for example, installing Heat Pumps and increasing the use of Electric Vehicles.
All of these assets must to be connected to the electricity grid. The problem? At all levels of the electricity system, new energy projects face long delays in connecting to the grid. At the most extreme, large generation assets like a new solar farm can face a 14-year wait to connect to the grid. Slashing those times would help to enable cheaper, cleaner energy for everyone.
Added to this, for businesses who are looking to install new low-carbon technologies, the connection process at local level is often not as seamless as it could be.
It’s important that grid connection policies drive improvements at all voltage levels. But why are grid connections so difficult to get? And what’s being done to improve the situation?
Currently, there are over 700GW of energy generation projects queueing to connect to the grid. This is far more than we’ll ever need to meet the UK’s 2050 Net Zero target. The application process to enter the queue has been too easy. The queue is bloated with speculative projects, that are holding back others under a ‘first-come-first-served’ approach.
This is due to change. In November 2023, the Government and the energy regulator Ofgem published a ‘Connections Action Plan’, committing to raise entry requirements and remove stalled projects. In the 2024 Spring budget, the Chancellor confirmed that the Government will implement a stringent new connections process from January 2025 for the high-voltage transmission network.
Since May 2024, representatives from the energy industry – including Centrica - have been working with the Electricity System Operator (ESO) to finalise details of a new regime that meets the requirements set by Government. The ESO believes that this could halve the current queue.
Similar reforms have already removed stalled projects from the lower-voltage local networks and the Distribution Network Operators (DNOs) are considering further improvements, including reviewing where alignment will be needed with the new transmission regime.
Another reason behind grid delays is the time it takes to build new transmission infrastructure. A separate Government plan, the ‘Transmission Acceleration Action Plan’ was published in November 2023 and contained 52 actions that would help to halve build times from 12-14 years to 7 years.
Key themes include taking a more strategic spatial approach to planning the grid; securing supply chains; building the required skills; and streamlining the planning process. There will be a concerted effort to improve engagement and buy-in from local communities hosting new infrastructure.
Most businesses connect to the lower-voltage distribution network, and a number of changes are taking place here to support the mass uptake of low-carbon technologies. Here are some examples.
Firstly, as monopoly providers, the large DNOs are regulated through price controls and licence obligations. As part of the ‘Connections Action Plan’, Ofgem is reviewing whether networks’ connections incentives, obligations and requirements are fit-for-purpose. Centrica believes changes are needed to the current framework to ensure DNOs provide timely connections and high-quality customer service. We’d also want to see more consistency in how different DNOs handle connections. Ofgem is aiming to have solutions in place by Summer 2024.
Secondly, Ofgem announced the creation of 13 new Regional Energy Strategic Planners (RESPs) across Great Britain. These will work with organisations at a local level including local government, the gas and electricity networks, communities and businesses to shape the energy system to local and regional needs.
Thirdly, the DNOs are harnessing artificial intelligence (AI) to accelerate connections. In May 2024, the DNOs jointly launched an AI-powered assessment platform which can provide instant approvals for domestic Solar, Heat Pump, EV Charger and Battery applications. This will help free up DNO resources to review more complex applications from businesses. More generally, the networks are increasing digitalisation of the grid and implementing smarter, more flexible operations - so that more low-carbon technologies can be accommodated on the network without the need for physical reinforcement.
At Centrica Business Solutions, we can help you to navigate getting new grid connections, as well as supporting you with planning permission, technology design, project installation, financing, and ongoing Operations and Maintenance.
Helen Stack
Helen Stack is a Regulatory Affairs Market for GB generation and wholesale markets at Centrica. Helen has over two decades experience on the European and UK policy and regulatory landscape. She engages on policy developments that are critical to support the efficient uptake of decarbonised energy assets. Her current focus is on grid connections and flexibility markets.
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