Market intelligence consultant Cornwall Insight recently published a paper concluding that the grid connections queue remains the greatest barrier to the energy transition. Pitched at investors and developers, the paper presents the results of a poll the consultancy carried out in collaboration with law firm Weightmans.
The paper, entitled Hurdling to Net Zero, lays out the key ‘hurdles’ the clean energy industry is encountering. As well as grid connections, it uncovers that macroeconomic headwinds and planning permission are each considered the greatest barrier to infrastructure rollout by 10% of respondents. A further 5% said that route to market was the biggest challenge.
Matthew Chadwick, the author of the paper, told Current± that it is important to remember how much has improved: “We outline all of these challenges, but the situation is looking more positive. A lot of these challenges have improved since we started writing this report back in February.”
The report’s outlook is broadly positive and concludes with advice to investors and developers on what they can do to get past barriers to “help push forward renewables deployment”.
While it would be nice to imagine policymakers will read the paper, Chadwick says, the intention is to give key actions for investors and developers to take, reassuring them that “all is not lost”.
It points out that increasing the diversity of strategies for route to market presents an opportunity to fine-tune projects. Further, co-locating a new generation or storage asset with an existing one can provide a quicker connection to the grid as well as potentially saving on costs associated with land and infrastructure.
It also advises that investors and developers increase the resilience of operational strategies, given that regardless of the “ongoing work” from industry bodies, the grid connections queue will not be cleared in the short term; National Grid Electricity Transmission’s research tool shows none of the listed sites on its network are offering transmission network connection dates before 2033.
The report further states that policymakers should provide certainty and clarity for investors, particularly with regard to REMA. It also calls for the grid reform process to continue and for reforms to the planning process.
Ofgem’s proposed grid connection reforms
Chadwick thinks the general view is that reforms are going in the right direction, particularly those targeting the removal of so-called zombie projects and the fact that changes will not just apply to new projects but also to the existing pipeline.
Current± discussed connection reforms with Oliver Petterson, connections manager at battery storage firm BalancePower, who said that Ofgem seems to have taken a reactive approach with its recent proposals.
The open letter it published discusses finding a balance between generation and demand by implementing a diverse range of technologies onto a network earlier, looking at different areas where there may be quite a large influx of generation schemes, and understanding how they can bring on, say, storage plans to help alleviate that excess generation during those periods when there is low demand.
“The way they’ve tried to do it is almost flushing out, I would say, the queue blockers that have been holding capacity for years.”
Petterson adds that Balancepower is looking at balancing the network’s evolving needs through clean energy solutions. The company is trying to address barriers to the transition, such as the constrained area between Scotland and England, and trying to understand where battery energy storage systems (BESS) can be utilised “a bit more effectively.”
“We just have to sort of see that and understand how do we operate more effectively without putting further constraint onto the network?”
As Chadwick points out, there is a broader issue with the grid connection side of things because the connections action plan is targeted at the transmission level. At some point, how it links up the local level and the transmission level will also have to be addressed; “it is not fully clear how that is going to link in”.
Further, Petterson adds that at the moment, funding is “very political” and getting schemes to a position that allows them to connect is easier for large-scale developers. Just because it is harder for small and medium enterprises (SMEs) to push projects forward does not mean they are less valuable.
However, the potential new approach to the queue focuses on bumping important projects up in the queue, and Ofgem will have to provide further clarity on who actually decides what the priority is for schemes moving forward.
Kate Mulvaney, principal analyst at Cornwall Insight, said that there is potentially an additional policy layer because the Labour manifesto talked about the energy transformation happening regionally; local control of power is something “they have clearly got in mind”.
“There’s clearly an aspiration there to use local expertise, maybe even local supply chains, to augment the development of coherent heat decarbonisation, industrial strategy, electricity decarbonisation; all of it happening as part of a complete system.”
Sidestepping the queue
Looking to get around the queue issue, BalancePower is exploring more innovative ways to bring clean energy to commercial users. Oliver Petterson says one of those things is a business solution looking at private wire arrangements, essentially bypassing yearslong delays in connecting to the grid. Co-location is another thing the company is looking at.
Like Chadwick, Petterson is positive about Ofgem’s moves toward clearing the connections queue. He suggests, though, that this be part of a wider change: “You cannot just create another problem in another area. It is easier to address it all as a whole.”
According to Chadwick, in compiling the report, many developers mentioned planning reforms when asked about the development process, with widespread support for the changed nationally significant infrastructure project (NSIP) boundary. However, it will be important to ensure that, if the change goes through after consultation, appropriate resources will be allocated to local authorities, who will see a substantial increase in planning applications.
Petterson’s concern is that developers will be very reactive to these changes, triggering an influx of applications once any changes are rolled out. “I think Ofgem, in particular, needs to put stricter boundaries on addressing what applications are actually deliverable.”
Petterson says BalancePower has had a few developments awaiting planning approval for between 12 to 18 months, well beyond the statutory wait time of 13 weeks. Like Chadwick, he highlights that resources need to be in place to manage the changes that will result from Ofgem’s decision.
