Response from Regen and the Electricity Storage Network, Ofgem’s future reform to the electricity connections process.
Response to Ofgem’s future reform to the electricity connections process
This response is based on our extensive engagement with clean energy developers and investors on the challenges facing low carbon energy projects, including our Grid Connections Working Group. Our Chief Executive also chairs the Steering Group for National Grid ESO’s ‘GB Connections Reform’.
Delays facing clean energy projects seeking to connect to the electricity network are now recognised across industry as one of the biggest barriers on the path to net zero. Our members inform us that their clean energy projects are now facing connection delays of
up to fifteen years (see also chart on next page). Regen raised these issues in a letter to Ofgem in August 2022 and a letter to the energy secretary in December 2022.
Given the scale and urgency of the challenge, we welcome the publication of Ofgem’s open letter and its commitment to publish a joint ‘Connections Action Plan’ with DESNZ this Autumn. Leadership from Ofgem and DESNZ is crucial to provide strategic direction
and momentum to connections reforms. We also welcome the work and commitment of National Grid ESO and the network operators who have already begun to implement action plans.
We agree with the proposed objective set out in the open letter to speed up connections timeframes. We also agree with Ofgem’s assessment that the challenges stem predominantly from a ‘first-come-first-served’ application process that is no longer fit for
purpose and the huge increase in the volume of applications to connect over recent years. Latest figures from ESO are that there is currently 320 GW (up from 257 GW in February) in the connections queue.
Three key areas of action are required to address the challenges:
- Moving rapidly to reform the connections process. There is consensus across industry that the connections process is no longer fit for purpose. Our Chief Executive chairs the Steering Group of the ‘GB Connections Reform’ led by National Grid ESO and we support its work to develop a radically different approach to transmission connections. Ofgem and DESNZ must be ready to enable rapid implementation of the new connections regime through regulatory changes, licencing, etc.
- Addressing the existing queue. Alongside reform, immediate action is required to unblock projects stuck in the queue and allow earlier connection dates to be offered to ‘shovel-ready’ projects. Unless the current queue is addressed, a new connections
process, however much improved, will have limited impact for many years. Ofgem should work with ESO and the network companies to ensure a fair and transparent approach to setting milestones for existing projects. We also back a technology-specific approach to the queue, including prioritising low carbon projects over fossil fuel generation and taking a smarter approach to storage connections.
- Reforming the grid investment regime. Though the open letter is focused on the connections regime, investment in grid infrastructure is a key part of the challenge. The grid investment regime has failed to deliver infrastructure developments in
coordination with and ahead of new generation connections. Ofgem should move rapidly to deliver on its proposal to move from ‘Connect and Manage’ to ‘Invest and Connect’.