New UK rules to speed up electricity grid connections for viable projects and allow stalled or speculative developers to be forced out of the queue have been announced by Ofgem.
The change is a big step away from the existing ‘first-come, first-served’ system to plug into the electricity transmission system whixhhas led to a long queue of projects which could generate almost 400GW of electricity.
The move will terminate existing stalled projects blocking the queue for high-voltage transmission lines and means ready-to-go generation and storage to enable net zero can be fast-tracked. It will apply to new schemes entering into agreements to connect to the grid.
The change comes after Ofgem’s chief executive Jonathan Brearley (pictured) said in May that urgent reform to the connections system was vital to unlock new investment and hit the national targets of 50GW of offshore wind capacity by 2030 and 70GW from solar by 2035.
Ofgem’s decision document stated stalled, slow to progress and non-viable projects in the connections queue result in a high-attrition rate of 60% to 70% with ultimately fail to materialise or connect.
It also laid out how the average gap between requested and offered dates has widened from 18 months (2019-20) to five years (2023-24).
The document further cited over 40% of 400GW of new generation capacity holding contracts have connection dates of 2030 or beyond – with some as late as 2037.
All 400GW capacity in the current queue, as it stands, would enable more generation capacity than projected to achieve a net zero power system by 2035 – but significant reform is needed to get there said Ofgem.
The new queue management milestones will be implemented by the UK grid’s operator, National Grid ESO, from 27 November 2023 and will be introduced to both existing and future grid connection agreements.
The rule change will give ESO the power to introduce strict milestones into connection agreements and terminate projects if they do not hit them at each project stage.
The ESO will also publish guidance on 27 November on how it will use its powers, with first terminations likely to happen as early as 2024.
The announcement comes ahead of a joint connections action plan which Ofgem and DESNZ (Department of Energy Security & Net Zero) are due to publish later this month. It also comes ahead of the government response to recommendations to halve the time to build transmission infrastructure by the then Electricity Networks Commissioner, Nick Winser.
It also builds on National Grid ESO’s five-point plan, which includes near-term initiatives with Ofgem support that will create capacity and acceleration of connection dates for transmission projects.
“The transition to net zero demands urgent changes to the electricity connections system – or we cannot unlock investment, speed up network build and accelerate new technology,” said Ofgem’s deputy director for institutions for net zero energy systems management and security Eleanor Warburton.
“This is a big step towards phasing out the first-come first-served queuing system.
“We want new power on the grid as quickly as possible, so if you’re ready, you can connect sooner.
“If you are not ready and are blocking the progress of others, you’ll be removed – you can’t sit on the queue with no consequences.”
Chief Engineer and head of networks at the National Grid ESO Julian Leslie added: “We warmly welcome these new rules approved by Ofgem enabling us to proactively terminate zombie projects in the connections queue.
“This is a milestone moment in the ESO’s efforts to lead the transformation of the grid connections process, making it fit for purpose for a modern network that is rapidly evolving and decarbonising.
“The ESO will be uncompromising in our approach to driving out projects that cannot meet their connection date, paving the way for more viable projects that have a real chance of plugging into the grid, energising the UK economy.”
Director of customer connections at National Grid John Twomey gave the new rules the thumbs up, stating: “This ‘queue management’ policy change is a welcome development and means network capacity will be used more efficiently. It’s great news for clean energy projects that are ready to connect, and for Britain’s net zero ambitions.
“Whilst queue management is a vital step forward in how connection projects are managed, it is not a panacea for resolving the challenges around connections arrangements.
“There’s much still to do, and we’re determined to continue our collaborative work with the ESO, Scottish transmission owners and industry to build on this latest development.
“We’re keen that the principles established through the queue management changes are built on in the government and Ofgem’s upcoming connections actions plan. Doing so will help deliver what we all want to see – a fit-for-the-future connections process that supports progress towards a clean, reliable and affordable energy system.”
The news was also welcomed by industry, which gave the move a cautious thumbs up.
“The decision by Ofgem to fundamentally reform the queue for connections to the electricity grid is a sensible one,” said Charles Rivers Associates vice president Simon Ede.
“The current system was designed for a world with a small number of large fossil fuel generators connecting each year. That is now long gone.
“The first-come-first-served arrangements have led a rapid proliferation of renewable energy projects, but the existing queue has become oversubscribed by a factor of 3-4 compared to what industry believes is needed, with many projects in the current queue unlikely to ever come to fruition.
“As highlighted in our recent public report for Centrica, the situation has become significantly worse in the last few years and is now frustrating the UK’s net zero ambitions. “The new arrangements allow for more active management of connections, shorten the amount of time it takes to connect viable projects, and accelerate decarbonisation of the electricity system.”
Regen’s chief executive Merlin Hyman added: “Regen wrote to the Secretary of State a year ago calling for action to unblock the queue of renewable generation and storage projects seeking a grid connection.
“We, therefore, welcome Ofgem’s announcement that projects will be required to meet milestones or risk losing their connection agreement. The Electricity System Operator will need to ensure this process is implemented in a fair and transparent way.
“It is vital that government, the regulator, the Electricity System Operator and the networks now keep up momentum to make the grid net zero-ready. In particular, Regen will continue to play an active role in developing a new grid connections approach, which we expect to be announced shortly by the Electricity System Operator.”