How grid connection delays are threatening net-zero goals

Developers looking to connect renewable energy projects to the electricity grid are facing delays of more than 15 years, threatening the UK's net-zero ambitions, E&T has heard.

As the country's target to decarbonise the electricity grid by 2035 looms ever closer, developers, engineering firms and consultancies have spoken to E&T about the connection delays that they say are putting both the climate targets and energy security at risk

In the last 18 months, the time it takes for developers to connect renewable energy projects to the national grid has soared, and Peter Aston, a specialist connections engineer at the consultancy Roadnight Taylor, says the waiting times are now a major problem.

"The transmission network just filled up and when you hit that limit on a network, you are suddenly into major reinforcement works. For National Grid ESO [the electricity system operator for Great Britain] to build a new circuit it can take 10 years. I think that's what has happened at transmission level – and so last year, we saw those connection dates jump to 2028, and then they just kept creeping up, to the extent that we have seen timescales offered of 2036 and 2037," he says.

Bill Rees is director of Centrica Energy Assets, a new arm of the energy giant set up in October 2021 with a mandate to develop, build and manage transitional assets to help the UK achieve net zero. He says his team started with a very strong marketing campaign. "We were at farm shows all across the country trying to find sites for solar battery primarily." However, he says, "very quickly, we found that the grid is fundamentally the biggest problem for connecting sites. Finding the sites and the landowners and getting planning permission is not the issue."

Rees says Centrica has a database in excess of 400 sites that will be suitable for renewable projects, but that over 90 per cent of them cannot progress because the grid connection issue "just kills them". He says the problem has continued to get worse, particularly in the last six months. In many instances his team has applied to the regional distribution network operator (DNO) for a connection but the DNOs have then been told by National Grid ESO that a supergrid transformer or a grid supply point further up the chain first needs upgrading. Where a connection date of 2025 would have been possible, these have been pushed back in some cases to 2040, he says.

Another renewables developer, Pathfinder Clean Energy, says it has had more that 30 viable projects totalling over 1.2GW delayed beyond 2028 due to transmission constraints. The firm told E&T that if it were not for these delays, it would have been able to connect these projects by 2025.

'You have the rhetoric from the government of wanting to be carbon-efficient, invest in PV, be efficient, be clean, but when you go to do it the DNO says no.'

Matthew Shaw, who works with a number of big-name developers for the consultancy Lynx Sustainable Solutions, says it's frustrating that "you have the rhetoric from the government of wanting to be carbon-efficient, invest in PV, be efficient, be clean, but when you go to do it the DNO says no".

National Grid ESO has recognised the problem. In a recent report it stated that the current connections process, which was originally focused on connecting a small number of large fossil fuel plants every year, "has not kept pace with the rapid changes occurring in the energy sector. As a result, the current process is not likely to enable the connection of the necessary volume of renewable generation and other associated technologies quickly or efficiently enough.

"There is common consensus across the industry that the current connections process is no longer fit for purpose," it adds.

The challenge cannot be overstated. David Cole, market director at engineering giant Atkins, described upgrading the grid and revolutionising the UK's energy system as "probably the biggest engineering challenge the UK has faced in a very long time. The aspiration is right but are we going at the right pace today? Absolutely not," he says.

Cole says his team has analysed the extra amount of power generation that needs to be built. "It's a big increase on anything we've ever achieved in the past. The most we've ever achieved is just over 6GW per year, and the average need to meet the 2035 net-zero target is 14GW per annum.

"We're building a lot at the same time. From nuclear, to renewables, to solar and new gas with carbon capture and storage as well some sort of hydrogen infrastructure," he notes. As a result, he adds, "we're also going to have to build a new transmission system, because quite a lot of the things we are building are in a different place to anything we've built before".

The problem is not just confined to the UK. Microsoft founder Bill Gates is calling for an urgent grid reinforcement programme in the USA. Writing in his blog in January, he said: "We need to upgrade our grid, build more high-voltage transmission lines that can carry electricity long distances, and use those transmission lines to better connect regions and communities to one another. If we do, we will make sure people always have power when they need it. And in the process, we will unleash the potential of affordable and abundant clean energy."

This creates an added challenge, notes Cole. "Many other countries have got the same challenges, so the competition for skills, the competition for investment, the competition for materials is all going to happen at the same time. So, pace becomes really important," he says.

Cole thinks that decision-makers are cautious because "you don't want to make a decision that is going to waste public money, or that is going to be detrimental to people's confidence in the government. You don't want to have stranded assets, so this tension becomes really hard."

This is particularly sensitive during a cost-of-living crisis; as E&T has previously reported, consumers will foot the bill for grid reinforcement. However, says Cole, "on the pragmatic side you know you just have to build it, really fast in the way that France did after the energy crisis in the 1970s. They put 50GW of nuclear on the bars in a very short space of time. They had a national endeavour to build at pace and as fast as possible because they knew they had an energy crisis. I think we're at the same kind of tipping point that says we need to move very fast.

"Connecting up the assets you build for energy efficiency, security, affordability and decarbonisation is fundamental to a successful deployment and reaching our goal of net zero in 2035 for electricity, and the pace at which we do that is really key," says Cole.

Rees at Centrica warns that the delays are impacting the wider economy. He says a large manufacturing company he is working with had ploughed ahead with planning and investment. "This company spent two-and-a-half years on the project and there's been a lot of money invested in the engineering and the analysis for it. It would have been a really good story for UK manufacturing, but just as we were about to sign the contract and enter into the project we were told by the DNO that it could not be connected until 2033, because the grid supply point needs to be upgraded," he says.

Rees says approximately 80 per cent of the 300 substations across England and Wales need upgrading. National Grid ESO would not confirm or deny the statistic. "Supergrid transformers are huge bits of kit that weigh several hundred tonnes, and it takes years to install them, says Rees. "We're talking five to eight years for each one of these. The government is telling all these companies to go green and charging them for their carbon emissions, but the companies can't actually physically do the thing they need to do to build that out. We've been frustrated by an archaic system."

One issue is the way in which the connection queue has been managed, according to Rees. He says it includes a large number of 'fluff projects' "that haven't made any progress – and they've been sitting there for years". Part of the problem, he continues, is that "if you want to apply for transmission connection, you don't need to have a letter of authority with a parcel of land, which means that ultimately you can hog positions on the queue even though you don't have land to attach it to".

He adds that the DNOs are "really struggling with the volume of work there is to actually manage this stuff. Something like a quarter of all connection staff are going to retire in the next two to five years, and they are understaffed as it is."

National Grid ESO says it is working on "a number of tactical, short- to medium-term initiatives that look at solutions to address current timescales for connections to the transmission network".

This includes streamlining the queue process through the Transmission Entry Capacity (TEC) amnesty, whereby developers who are already in the queue are offered the chance to terminate their agreement at minimal or no cost. This should incentivise firms to ditch projects which have little chance of getting off the ground and are holding up the queue. "We're going to see in the next few months whether that's had any major effect," says Aston from Roadnight Taylor.

National Grid ESO is also reforming the way it models grid-scale batteries. Of the 300GW-worth of accepted connection offers, about 90MW are grid-scale batteries, notes Aston. "In the past, National Grid ESO has modelled them in a worst-case scenario way. It had assumed that batteries are going to be charging during peak demand time in the evening – but this is when power prices are at their absolute highest, so there's no way batteries are going to be charging at peak demand times," he says.

Last December, National Grid ESO said it would assume batteries would not import energy during peak demand times and not export at peak generation times. Aston thinks this will have "a major impact on the transmission reinforcement work that needs to be done". Over the course of this year, National Grid ESO is going to reissue about 300 individual connection offers to distribution and transmission customers. "A lot of these offers will have an improved timescale as a result of the fact that they don't need to do so much network reinforcement, because they're not modelling these batteries in a really negative, worst-case way any more," he adds.

DNOs are also investing £31bn over the next five years to improve grid infrastructure and help ensure Britain's energy systems can meet the demands of the net-zero transition, including connecting renewable generation schemes large and small, according to the Energy Networks Association, which represents network operators.

A spokesperson says: "To reach our net-zero targets, we need more than just investment, as other issues remain, particularly around planning and regulation. In order to more quickly connect more renewable generation we need three things – a continued focus on innovation and flexibility, investment to enable network capacity in anticipation of future need, and a coordinated and accelerated planning system which brings together local and national ambitions."

Despite this, experts have told E&T that chronic underfunding is the main cause of the delays now being seen. David Hall, vice president of power systems at Schneider Electric UK & Ireland, says: "A slowing in investment, alongside a physical reduction in the rate of installed capacity of clean-energy generation and storage to the UK grid, puts the UK behind the curve in meeting its 2035 Energy System targets and securing its energy supply.

Lynx Sustainable Solutions' Shaw says there is buck-passing. "The DNOs blame the energy regulator Ofgem and National Grid ESO for the delays. But there is no mandate for Ofgem and National Grid ESO to invest in the grid because that cost will be passed on to the consumer. No government wants to do that, but the flipside is that they must, in order to keep down costs."

According to Shaw, it is not just the Russian invasion of Ukraine which has led to higher energy bills but also "the long­standing failure of the government to invest in our grid and not taking other countries seriously ... Germany runs on micro grids now so that its energy cost is minuscule. France went down the nuclear route – their grid runs at a fraction of ours because they invested in it."

Rees accepts that there are some fixed costs that need to go up. "But actually, if we had a lot more generation on the grid, then the actual commodity element of what we're building will bring those energy bills down."

Charity Citizens Advice appears to agree with this analysis. In a recent consultation response to Ofgem, it said that "given the urgency and the scale of the issue of transmission delivery speed we question whether the regulator has taken a relatively cautious approach to implementation, so that consumers are protected against exposure to unnecessary costs. We would see reducing consumer exposure to constraint costs as a sensible cautionary measure.

"The scale of constraint costs caused by insufficient transmission capacity is a huge risk to consumers, which will continue to add many billions of pounds to energy bills as the GB energy system struggles to adapt to ambitious offshore wind targets."

The concern is not just about carbon goals; it is also about energy security. "If you step back into the bigger picture, yes, there will be some costs to reinforcing the network," says Rees, "but thank goodness the last winter was not freezing cold, because the margin of supplies we have is very thin. The war in Ukraine highlights just how much we need of our own homegrown energy. Renewables is a great way to do this, but we just need to find a way to connect them to the grid."

Rees thinks the government has been too reactive. He says it should be asking what kind of environment it needs to create "that will encourage investment in the right areas by the right people, with the right risk profiles, the right returns, to get to the right prices for our customers and the right carbon footprint". He says, "so far, National Grid ESO is trying its best to tweak the system", but a "fundamental overhaul" is needed.

A spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said the government "would continue to work with Ofgem and the industry to address barriers to connecting to the electricity network and to accelerate Britain's electricity connections".

"Ofgem as the independent regulator is responsible for regulating networks to invest in their grids, and we welcome the work they have done to enable greater levels of strategic and coordinated investment." BEIS says the government remains committed to publishing the Strategy and Policy Statement for Energy Policy, a full public consultation for which will be conducted in the Spring.

Ofgem says that in order to realise the government's ambition of a net-zero power system by 2035, "a dramatic expansion of the existing electricity network is needed along with a whole-system approach to planning that system". The regulator said it had recently made an accelerated investment of £20bn "in record speed to green light an unprecedented amount of anticipatory investment in electricity transmission".

However, Ofgem also said that government intervention was needed in the form of "regulatory changes to reduce the waiting time for the increasing number of connections to the electricity network that are now being made and are expected to be made".

While the government, Ofgem, the DNOs and National Grid ESO recognise that delays to connections put the 2035 decarbonisation target at risk, and are working to remedy the situation, they are running out of time. As Aston notes, 2035 is just 12 years away and some of the transmission projects easily take 10 years to 12 years to complete, so "we have got to be doing it now to make it work".