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There was a time when the UK’s energy grid was recognised as among the most stable in the world. It was efficient. Innovative, even.
All of which no longer matters; the environment has changed.
Today, the demands of decarbonisation have propelled the issue of grid modernisation up the political agenda. It’s not only central to Labour’s ambitions to double onshore wind, triple solar power and quadruple offshore wind by 2030. It’s central to the country’s net-zero future.
The required upgrades are an enormous undertaking. Not only must renewable projects be plugged into the grid faster, but so too must facilities to store this power in times of excess and release it in times of scarcity. The catch, of course, with renewables is that they are inherently variable. And there is a question of how this grid balancing will occur.
All of this means there is a lot of infrastructure to be built and connected.
Addressing the project backlog
One of the greatest challenges is the ever-growing list of projects seeking connection to the UK’s transmission network. The queue has long operated on a first-come, first served basis, with a backlog of renewable energy projects thought to be capable of producing approximately 400 gigawatts (GW) of power. To put that in context, peak energy demand of the UK grid is 50GW.
To make matters worse, according to Ofgem, 40 per cent of grid connection dates offered are for 2030 or beyond, with some waiting up to 20 years. But there is good news; huge change is ahead, potentially more transformative than anything we’ve seen for decades.
Labour’s newly established National Energy System Operator (NESO) has launched the Connections Reform project, designed with tomorrow’s energy landscape in mind.
The application process and the current queue positions are set to change. Projects that haven’t moved since they entered the queue will lose their place. A new gated system will see more rigorous examination of project readiness, too.
Making these changes a reality in the timescales needed will not be easy. The administrative burden of assessing the current queue and determining who moves where, and in what order, is massive. It will take full-scale engagement across the industry for it to work.
Grid infrastructure
Elsewhere, a shift in infrastructure is also underway. Energy ministers have tasked NESO with developing a strategic spatial plan that maps where net-zero infrastructure, from generation to storage and transmission, should be built between now and 2050.
The move will provide much-needed long-term stability for investors, ensuring that the right infrastructure can be scaled up where needed most, while keeping costs down.
GB Energy will also bid to construct parts of the required infrastructure. This is a radical change and implies partial nationalisation of the grid. But, this is a proven strategy for investing in more expensive and higher-risk projects. We’ve seen this before with state investment into nuclear power plants.
This could allow private operators to opt for the lower-risk areas of the grid. For example, Eclipse, an independent distribution network operator (DNO) owned by Octopus, thinks it could deploy £3bn ($3.8bn) of capital if it received a licence for transmission work.
A clean future for the UK
A steady, home-grown, clean energy supply would be a major boon for the UK – generating economic growth and strengthening our energy independence while protecting consumers from volatile international energy markets. And that can’t come soon enough; the UK is currently paying among the highest energy costs in the world.
There is no silver bullet. The issues are far too complex to expect that. However, we do have a clear intention on the part of the NESO, and by extension, the new government, to address a system that is not fit for the purpose.
Whether it will be enough to reach the 2030 goal remains to be seen, but action to end the gridlock that has held back the UK’s clean energy ambitions is welcome.
Image: Evgeniy Alyoshin / Unsplash
