The Energy Transition | National Grid Completes Two-step Grid Connection Offer Process

National Grid Electricity System Operator (ESO) and National Grid Electricity Transmission (NGET) have concluded the two-step grid connections offer process, having issuing final revised connection offers...
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National Grid completes two-step grid connection offer process

National Grid Electricity System Operator (ESO) and National Grid Electricity Transmission (NGET) have concluded the two-step grid connections offer process, having issuing final revised connection offers to all customers joining the connections queue between the initiative's inception at the end of February 2023 and 1 March 2024.

The temporary two-step process was designed to accompany the roll out of new Construction Planning Assumptions (CPAs) containing updated modelling assumptions to reflect more realistic analysis in respect of drop-out rates for projects in the connections queue, and the impact of batteries on the transmission network. Under the former CPAs the assumption was that the majority of projects in the queue would be delivered, when typically only between 30 and 40% of projects connect.

The ESO reviewed over 500 applications as part of the offer process, representing 150GW of capacity in the transmission queue.

Under the two-step process, customers received an interim offer within three months of their application comprising a connection queue position, a point of connection and a guarantee of connection by a specified year. In step two, customers received the remaining details included in the usual connection offer, including details of the required works and costs for the projects. At this point, customers were able to either leave the queue without a penalty or would be expected to provide securities for the project.

This process was intended only as a temporary stop-gap to enduring grid connection reform including the ESO's TMO4+ proposals, based on the "first ready, first connected" approach, with the intention being that if approved by Ofgem, the ESO will implement the reformed connections process by January 2025.

Nicola Bruce, Head of Connections Operations at the ESO, reflected that the "two-step process was one of many initiatives introduced to help [the ESO] manage the queue, improve connections dates through more realistic assessment and modelling, and create space to transition towards wider connections reform".

Anticipating a more resilient winter: ESO releases 2024/25 winter Early View Report

The ESO has published its "Winter Outlook 2024/25: Early View Report" to help inform and prepare the electricity industry for the coming winter.

The report predicts that there will be increased capacity and better resilience across the grid this winter compared to last. Margins are expected to be adequate and within the reliability standard, and the "Base Case" margin has improved from 4.4 GW last winter to 5.6 GW, suggesting that there will be enough capacity to meet the average peak "cold spell" demand of 59.8 GW. The ESO also predicts that there should be sufficient operational surplus throughout winter, although there may be some days where this is tight, with this being especially likely in late November, early December and late January.

The ESO states that energy markets are "showing signs of finding a new equilibrium", although the ESO will remain cautious of uncertainties and risks. The report finds that among other factors, the market improvement from last year is due to increases in interconnector and battery storage capacity, and the effects of increased generation connected directly to the distribution networks.

Furthermore, a variety of energy market developments, such as rebalancing in European energy markets and the procurement of 7.6GW of capacity in the T-1 Capacity Market auction for the coming winter, have contributed to enhanced of security of supply.

The ESO highlights the development of its Demand Flexibility Service, which strives to provide demand flexibility at a national scale to mitigate risks and uncertainties, and aims to shortly publish information from its engagement with industry stakeholders as to how this service could evolve.

Electricity system dominated by offshore wind could save consumers £68 per year by 2035

A report by Aurora Energy Research has suggested that the lowest cost electricity system that could be built by 2035 would be one dominated by offshore wind, with this proving to be far more cost effective than alternatives dominated by gas or importing power from abroad using interconnectors.

Commissioned by RenewableUK, the trade association for the UK's renewable energy industry, the report modelled future electricity systems with differing capacities of offshore wind and assessed the cost to consumers by 2035, with the aim of highlighting the roles that various technologies can play in the drive to net zero.

The report found that:

  • a system using predominantly offshore wind to generate electricity would save consumers approximately £68 per year, in comparison to a scenario where the government does not allocate any further contracts for difference (CfDs) to offshore wind projects; and
  • a system whereby the government abandoned net-zero targets in favour of gas would leave consumers an average of £39 worse off per year than the offshore-wind dominated model, with a risk of this rising to in excess of £133 in the event of sustained high gas prices.

As well as providing the lowest cost model of electricity generation, the report found that a system dominated by renewable energy sources such as solar and wind would protect consumers against the fluctuating prices prevalent in a system exposed to volatile global gas prices, because offshore wind capacity the government procures at annual auctions is secured at a fixed price.

Chief Executive of RenewableUK, Dan McGrail, underlined the association's confidence that the report showed that "shifting to an energy system dominated by offshore wind and renewables is the best decision for billpayers".

Investment from UK financial services into clean energy projects triples in 2023

The City of London Corporation and the Climate Policy Initiative (CPI) has released the "From the Commitment to Action" report confirming that UK financial institutions invested $2.3 billion (£1.8 billion) into clean energy projects in 2023, three times the value invested in 2022. The financial services sector is integral to meeting climate change targets, with the CPI estimating that to deliver on the aims of the Paris Agreement and limit worldwide temperature rise to below two degrees, $6 trillion is required globally between now and 2050, a sum that public finance cannot reach alone.

The rate of investment growth into clean energy projects in the UK was faster than that seen in the other financial centres identified in the report (France, Germany, Japan and the USA), and 2023 saw an average 59% increase overall across these five jurisdictions. The report also shows that almost all of the financial institutions studied across the financial centres have net-zero targets in place, and that transparency in respect of these targets had improved.

Policy Chairman of the City of London Corporation, Chris Hayward said that "it is fantastic to see that UK financial firms continue to lead the way on the implementation of climate commitments" and reiterated that "the UK's financial services sector has played a critical role in supporting the transition to net zero globally."

Restrictions on rooftop solar softened in Scottish permitted development rights reform

The Scottish government has brought into force new rules for permitted development rights (PD), which set out the works which can be carried out to properties without an application for planning permission. As a result of the reform, restrictions on the scale of permitted rooftop solar developments have been significantly eased.

The overhaul of the existing PD rules forms part of a wider goal in Scotland, which is seeking to deliver 6GW of solar generation by 2030. Previous PD rules stipulated a 50kW upper limit for permitted rooftop solar developments on both domestic and non-domestic buildings, above which full planning permission was required. Under the new rules, this limit has been removed and there will be a relaxation of the previously blanket exclusion from the PD regime of solar within Scottish conservation areas. Further, up to 12m² of free-standing solar panels is permitted within the grounds of non-domestic buildings without the need for planning consent.

Thomas McMillan, chair of Solar Energy Scotland, stated that simplifying the planning process will make a "substantial difference" and that "solar remains one of the most effective ways of reducing the charges of running residential and commercial buildings".

This article was written with the assistance of Khushal Thobhani, Jessica Sawford, Charlotte D'Arcy, Luke Hopper and Hannah Bradley, trainee solicitors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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