Huge change is ahead when it comes to grid connections – change that is probably more significant than anything we’ve seen in the industry for decades.
With more developers than ever looking to find their place on the grid, yet with over half of their projects facing connection dates beyond 2030 – and others waiting up to 20 years – change is welcomed by anyone working in this fast-moving sector.
National Grid Electricity System Operator’s (NGESO’s) Connections Reform programme is set to address these problems and more, by ripping up the current connections process, re-writing the rule book and creating an entirely new system, re-designed around tomorrow’s energy landscape.
We hosted a webinar this month to discuss all things Connections Reform and to address some of the shared concerns and misunderstandings. Whilst our attendees had questions covering a wide range of issues, a huge 79% of them also told us that they are concerned the reforms won’t go far enough.
That’s understandable. For many of the people, the connections process may have been challenging, frustrating and hugely time consuming. That’s exactly what the reform programme looks to address, and its why we’ve made sure we’re as embedded in the discussion as possible to understand and influence everything we need to, about the changes on the horizon.
Here’s some of our key takeaways to support understanding Connections Reform. But, they come with a clear caveat – we’re still some months and formal regulatory change processes away from go live, so things could still change:
There’s no escaping it
Connections Reform will affect everyone in the sector. It’s largely focused on the transmission application process, but will impact on anyone connecting anything significant at transmission or distribution.
Transmission projects form the main bulk of the gigawatts in the connections queue (>500GW of the 700GW contracted to connect) but it will impact on many of the 7,000 distribution projects in the queue.
Schemes that are deemed to not be ‘material’ at distribution level will not have to go through the process. Depending on your offer and your Distribution Network Operator (DNO), if you’re a generator at distribution level, at less than a MW, you’ll likely be exempt from the new process.
It’s an attack on the cause of the queue, not necessarily those waiting in it
The volume of applications sitting in the connections queue is colossal. This has increased by 10-fold in the last five years, with the transmission queue currently at 534GW and the distribution queue at 155GW, the latter made up of 7,000 projects.
The incredible statistics show a huge growth in potential providers from an array of energy sources – but peak demand on the UK grid is currently only around 50GW. This is forecast to double in the years ahead but we will be very unlikely to see peaks anywhere near 700GW.
Whilst it is excellent to see the renewables industry swinging into action so comprehensively, the clamour for connections has triggered the need for unprecedented grid reinforcements, creating lengthy timescales for projects – the longest proposed connection date we’re aware of, so far, has been 2043. Almost 20 years for a project to complete.
As a result, National Grid ESO is trying to get projects that are more speculative, or that simply aren’t progressing, out of the queue to allow projects that are closer to ‘shovel readiness’ to get moving. This will also allow us, as a society, to invest in the right infrastructure and in the right order.
The application process will completely change – and so could your current queue position
With a new ‘gated’ window process ahead, projects will be assessed very differently, and those that entered the current queue but remined static, will lose their place entirely.
To get to Gate 2 in the process, you need to be ready to submit your planning permission within a reasonable timescale, with land options agreed. These become your ‘milestones’ and if the milestones aren’t met within the designated timeframes, your offer could be terminated – and with cancellation charges applying.
Importantly, Gate 2 requirements will also be applied retrospectively on the current queue so, according to the proposed timetable, if you haven’t met these by the end of this year, you will lose your queue position and, potentially, your point of connection too.
Conversely, others that have already met the Gate 2 criteria could see their connection dates accelerated or their connection locations improved. It won’t be a quick fix. We anticipate around 200GW worth of projects could meet Gate 2 in the first 2025 window, so the backlog may still be significant.
Ultimately, we predict there will be some real winners and many losers in this first phase of change.
Application window timescales
We know people are concerned about the speed of change and being ready to meet their chance to apply for Gate 1, which will be at the start of a 12-month period. It hasn’t been confirmed when this will be, but we expect it to be in January 2025. Ahead of this, we’re hearing that there will be ‘pre-application’ time for the ESO to publish data and hold workshops, before a formal application window will open, giving projects a month to get their applications in. This means projects should have enough lead in time to prepare.
Levelling the playing field
The industry has been clear that at the moment, there are some massive disparities – particularly between transmission and distribution, and also between DNO licence areas – when it comes to progression through the connections process. The intention is that the reformed process will stop this, whilst also allowing flexibility within the system.
There are risks that we simply create greater disparity and this must be addressed. For example, embedded customers do not talk directly to the ESO, they communicate through their DNO. So, when the ESO asks ‘who has met the requirements of Gate 2’, transmission customers will be able to put their hand up for a connection point and connection date.
Embedded customers will be reliant on their network operator to put their hand up on their behalf, and in a timely fashion.
DNOs who submit batch Project Progressions also need to find out a way to deal with individual customers, and report back to the ESO, in the same timeframes that the ESO can go out to its own customers.
These are the kinds of risks we have flagged as part of our role on the Connections Process Advisory Group, and it’s encouraging that details will be thrashed out to deal with this real risk.
Timelines are tight
We’ve only touched on a tiny amount of detail here to flag just some of the considerations for those with accepted connection offers or those embarking on connections projects in the future
What we know is that, subject to the Connections Use of System Charging Code Modification Proposal process, Licence Change processes and Ofgem’s approval, these changes are happening. We can view them as largely ‘election proof’ as they don’t require parliamentary debate or primary legislation change.
Making this change a reality in the timescales proposed won’t be easy. The administrative demand involved in simply assessing the current queue, determining who should move to Gate 2 and in what order, and then who should lose their place in the process, is staggering.
It’s going to take full-scale engagement across the industry to make this work. Connection customers must understand what is required of them moving forward to avoid mass rejection of applications or legal challenges.
This isn’t a silver bullet to fix what is a complex set of issues, but it is a clear intention on the part of the ESO to address a system that is not fit for purpose.
