A power connections conundrum

New connections for assets that generate power are particularly prone to delay, but represent only part of the problem. More focus is needed on the pace of change, and how demand for power as well as generation should be managed.

In England and Wales, there are around 50 connection applications to the electricity transmission system each month, according to the National Grid. But only around one in 10 such projects actually go ahead. As such, the ‘first come, first served’ system needs to be replaced with ‘first ready, first served’.

In November’s Autumn Statement, chancellor Jeremy Hunt announced a new Connections Action Plan (CAP) from the Department for Energy Security and Net Zero and regulator Ofgem. CAP is a lengthy document detailing plans to reduce connection timescales. The average connection time for large generation projects has grown to five years, and the CAP target to slash this to just six months is hugely ambitious.

Late last year, power company trade body Energy Networks Association (ENA) published its own plan – ‘Rising to Britain’s Net Zero Challenge’ – so the power companies should be well ahead of the game already.

However, the target dates in CAP are ambitious, some have already passed, and there is currently no incentive to achieve these dates and no penalties if they are missed.

CAP demands a rapid increase in pace and there is no real, tangible detail around this. Ofgem is pushing responsibility down to the power companies, dictating what needs to be achieved and the timetable, but it seems the ‘how’ is missing from its plan. This poses the question: who is ultimately held accountable?

CAP is trying to improve speed and performance of the grid, but applicants ultimately still end up in the connections queue. Assessing the prospects of projects remains an ongoing challenge for the power companies. Without the staff or incentives to manage the queue, projects not moving forward remain where they are, continuing to block schemes that have the means to make more rapid progress.

This situation is problematic because most of the actions are with the National Grid. While committed to ensuring a fit-for-purpose network, it doesn’t move quickly. The last proposed change took two years to be agreed. If this is an indicator of pace, then CAP’s ambitious dates will not be hit.

And while a change in pace is critical, there is no let-up in the huge pressure on the grid to supply power for new commercial and housing schemes.

Recent changes have resulted in a reduction in connection costs, but often distribution network operators (DNOs) are classifying project works as ‘extension assets’, meaning the cost remains high.

Slow timescales are also affecting the viability of schemes. CAP says power should be drawn in parallel with any work required to reinforce the grid to supply a new development. Ofgem confirmed that from Q4 2023, offers from DNOs would not say ‘reinforce first’. But we have one client where the DNO stated there will be total curtailment – no power, in other words – for 75% of the time before reinforcement is done.

Indeed, the feasibility of supply in parallel with reinforcement is very dependent on the type of development. For example, gradual ramping up of power in advance of reinforcement works would be relevant for a housing development, but not for a new data centre. For such an important part of the process, grid reinforcement feels rather overlooked by CAP.

It seems reasonable to ask how achievable the improvements set out in CAP really are. Why is the system still so archaic, and not based around accurate data about the ability to connect?

At present, it is still a case of forming a (not so) orderly queue for connections.